Question

Your friend wants to borrow $1,137.45 from you to pay off a credit card that charges a 14.7% APR. You agree to the loan but require your friend to pay you interest of 3.6% APR on the loan and your friend agrees.
Your friend pays you $200.00 at the end of the first month. How much goes toward the principal?

Answer 1

@ganeshie8 @Hero @phi help?

Answer 2

1) The outstanding balance accumulates with interest like this:

$1,137.45 (0.036/12) = $3.41.

Now, out of the $200, 200-3.41 = $196.59 goes toward the principal

Her friend would have paid interest = $1,137.45 (0.147/12) = $13.93.

So she saved $13.93 - $3.41 = $10.52

Hope that helps

Answer 3

thanks! could you help with the second part to that question?

Answer 4

yea sure

Answer 5

2. how much interest does your friend save compared to the credit card at the end of the first month?

Answer 6

shoot im actually im not sure:/

Answer 7

oh wait would the answer to number 2 be $10.52?

Answer 8

Justin - you and jbean in the same class?

Answer 9

im a junior

Answer 10

im a junior too but im taking consumers math this year

Answer 11

By that I mean you answered "part 2 " of a question that wasn't even asked.

Answer 12

lol i looked it up real quick

Answer 13

looked it up quick where? You have access to questions not everyone can even see?

Answer 14

take your question and copy and past into google

Answer 15

paste*

Answer 16

well at least it is nice to know how people are getting the questions and answers

Answer 17

For this problem wouldn't it be nice to know how many years these payments will be made? (Shouldn't that be the first step?)

Answer 18

I calculate .479 years.
Agreed?

Answer 19

Do you folks have any formulas for this?
These formulas are pretty difficult:
Here is the formula for years (months actually)
http://www.1728.org/loanfrm3.htm
Guess you folks left.

Answer 20

holy poop no lol