Question

Consider a student loan of ​$17,500 at a fixed APR of ​12% for 20 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.

Answer 1

a. The monthly payment is $179.03.
b. The total amount paid over the term of the loan is $43,814.80.
c. Of the total amount paid, $26,314.80 is paid for interest (60%) and $17,500 is paid toward the principal (40%).