Question

Charley Bateman obtained a loan of $2,400 to install a solar panel on his roof. The interest rate is 12% and the monthly payment is $113.04. How much of the first monthly payment covered principal?

Answer 1

Do you have any work done so far?

Answer 2

yes the interest 112.92

Answer 3

i dont know how to do the rest

Answer 4

how did you get 112.92?

Answer 5

from subtracting monthly payment and rate

Answer 6

I see

Answer 7

You actually take the annual rate of 12% and use this to find the monthly rate

what must you do?

Answer 8

uhm i dont know ? ;o

Answer 9

how many months are in a year?

Answer 10

12

Answer 11

so we divide the annual rate (12%) by the number of months

12%/12 = 1%

therefore the monthly interest rate is 1%

Answer 12

take 1% of the amount loaned to compute the first interest payment

tell me what you get

Answer 13

24

Answer 14

so that's the interest payment

Answer 15

"How much of the first monthly payment covered principal?"

Answer 16

do you see how to use that interest payment of $24 to get your answer?

Answer 17

yes thank you

Answer 18

ok great