Question

The following table shows a portion of a five-year amortization schedule.
A 5-year amortization schedule. Loan amount or principal: 10,900 dollars. Interest rate on loan: 10.95 percent. A 5-column table with 6 rows. Column 1 is labeled Month with entries 15, 16, 17, 18, 19, 20. Column 2 is labeled Payment with all entries 236.72. Column 3 is labeled Principal with entries 155.87, 157.29, 158.73, 160.18, 161.64, 163.11. Column 4 is labeled Interest with entries 80.85, 79.43, 77.99, 76.54, 75.08, 73.61. Column 5 is labeled Balance with entries 8,704.27, 8,546.98, 8,388.25, 8228.07, 8.066.43, 7,903.32.
What percent of the payments made were due to interest for the months shown?
a.
30.9%
b.
32.6%
c.
62.5%
d.
63.4%



Please select the best answer from the choices provided


A
B
C
D

Answer 1

B

Calculation: Interest total = 80.85+79.43+77.99+76.54+75.08+73.61 = 463.50.
Total payments = 6 × 236.72 = 1,420.32.
Percent = 463.50 / 1,420.32 ≈ 0.3262 = 32.6%.