Consider a student loan of $22 comma 500

at a fixed APR of 12
%
for 30

years.
a. Calculate the monthly payment.
b. Determine the total amount paid over the term of the loan.
c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest.

a.#The starting loan principal = $22,500; the interest rate = 12%; there are 12 payments per year; the loan term = 30 years;the monthly payment is calculated as;

[tex]PMT=\frac{p(APR/n)}{1-(1+\frac{APR}{n})^{-nY}}\\\\=\frac{22500\times \frac{0.12}{12}}{1-(1+\frac{0.12}{12})^{-12\times30}}\\\\=231.44[/tex]

Hence , the monthly payment is $231.44

b. The total amount paid over the loan's term is calculated using the formula:

[tex]A=PMT\times m\times n[/tex]

m-number of months in a year,

n-number of years

PM-monthly payments.

[tex]A=PMT\times m\times n\\\\=231.44\times 12\times 30\\\\=83318.40[/tex]

Hence, the total amount paid over the term of the loan is $83,318.40

c. We then calculate the interest and principal as a % of total loan repayments:

[tex]Principal=\frac{P}{A}\\\\=\frac{22,500}{83318.40}\\\\=27\%\\\\Interest=100\%-27\%\\\\=73\%[/tex]

Hence, principal portion is 27% and the interest portion is 73%

Consider a student loan of ​$22 comma 500 at a fixed APR of 12 ​% for 30 years. a. Calculate the monthly payment. b. Determine the total amount paid over the term of the loan. c. Of the total amount​ paid, what percentage is paid toward the principal and what percentage is paid for interest.

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Consider a student loan of $22 comma 500

at a fixed APR of 12
%
for 30

years.
a. Calculate the monthly payment.
b. Determine the total amount paid over the term of the loan.
c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest.