To determine how much of the 31st payment will go toward interest, follow these steps:
1. Identify the outstanding principal: The outstanding principal at the time of the 31st payment is \[tex]$596.
2. Determine the annual interest rate: The annual interest rate is 12%.
3. Convert the annual interest rate to a monthly interest rate:
- The monthly interest rate is the annual interest rate divided by 12 (since there are 12 months in a year).
- \(\text{Monthly Interest Rate} = \frac{12\%}{12} = 1\%\) per month.
- Converting 1% to a decimal: \(1\% = 0.01\).
4. Calculate the interest portion of the 31st payment:
- Multiply the outstanding principal by the monthly interest rate.
- \(\text{Interest for 31st payment} = 596 \times 0.01\).
- \(\text{Interest for 31st payment} = 5.96\).
Therefore, the interest portion of the 31st payment is \$[/tex]5.96.
