To determine how much of the 14th payment will go towards interest, given an outstanding principal of [tex]$1,000, you need to follow these steps:
1. Identify the annual interest rate: Given as \(9\%\).
2. Convert the annual interest rate to a monthly interest rate:
\[
\text{Monthly interest rate} = \frac{\text{Annual interest rate}}{12}
\]
For a \(9\%\) annual interest rate:
\[
\text{Monthly interest rate} = \frac{9\%}{12} = 0.75\%
\]
As a decimal:
\[
0.75\% = 0.0075
\]
3. Calculate the interest payment for the 14th month by applying the monthly interest rate to the outstanding principal:
\[
\text{Interest payment for 14th month} = \text{Outstanding principal} \times \text{Monthly interest rate}
\]
Given:
\[
\text{Outstanding principal} = \$[/tex]1000
\text{Monthly interest rate} = 0.0075
\]
[tex]\[
\text{Interest payment} = 1000 \times 0.0075 = \$7.50
\][/tex]
Therefore, the interest portion of the 14th payment is:
[tex]\[
\$7.50
\][/tex]
So, the answer is:
Interest on the 14th Payment = \$7.50
