Question

On January 1, Matthew borrows $6300 with a fixed interest rate on the loan of 10% and a loan term of 2 years. He will be making monthly payments of $290.71. How much of Matthew’s fifth loan payment would be interest charged?(Round answers to 2 decimal places, e.g. 52.75.)

$44.46

$42.41

$46.49

$48.51

On January 1, Steven borrows $5700 with a fixed interest rate on the loan of 10% and a loan term of 2 years. He will be making monthly payments of $263.03. How much of Steven’s fifth loan payment would be principal?(Round answers to 2 decimal places, e.g. 52.75.)

$222.80

$217.33

$219.14

$220.96

Answer 1

Interest charged on fifth loan payment

Monthly Loan Amortization Schedule

Month	Beginning Amount ($)	Total Payment ($)	Interest Payment at 0.8333% ($)	Principal Payment ($)	Ending Balance ($)
1	6,300.00	290.71	52.50	238.21	6,061.79
2	6,061.79	290.71	50.51	240.20	5,821.59
3	5,821.59	290.71	48.51	242.20	5,579.40
4	5,579.40	290.71	46.49	244.22	5,335.18
5	5,335.18	290.71	44.46	246.25	5,088.93

“Interest charged on fifth loan payment will be $44.46”

Principal paid on fifth loan payment

Monthly Loan Amortization Schedule

Month	Beginning Amount ($)	Total Payment ($)	Interest Payment at 0.8333% ($)	Principal Payment ($)	Ending Balance ($)
1	5,700.00	263.03	47.50	215.53	5,484.47
2	5,484.47	263.03	45.70	217.33	5,267.14
3	5,267.14	263.03	43.89	219.14	5,048.01
4	5,048.01	263.03	42.07	220.96	4,827.04
5	4,827.04	263.03	40.23	222.80	4,604.24

“Principal paid on fifth loan payment will be $222.80”