Answer:
Balance = $14,723.06
Step-by-step explanation:
Given:
Principal (P) = $15,000
Interest Rate (R) = 7.5%
Time (T) = ¹/12
Monthly payment = $185.49
Required:
Balance of the loan at the end of 3 months using the formula for simple interest.
SOLUTION:
[tex] I = \frac{P.T.R}{100*12} [/tex]
First Month:
Principal => $15,000
Add interest => [tex](\frac{15,000*7.5*1}{100*12} )[/tex] => $93.75
= $15,093.75
Less payment => $185.49
= $14,908.26
Second Month:
Principal => $14,908.26
Add interest => [tex](\frac{14,908.26*7.5*1}{100*12})[/tex] => $93.18
= $15,001.44
Less payment => $185.49
= $14,815.95
Third Month:
Principal => $14,815.95
Add interest => [tex](\frac{14,815.95*7.5*1}{100*12})[/tex] => $92.60
= $14,908.55
Less payment => $185.49
Balance = $14,723.06
