Question

The following table shows a portion of a three-year amortization schedule.
A 3-year amortization schedule. The loan amount or principal is 11,940 dollars and the interest rate is 7.45 percent. At 24 months, the monthly payment is 371 dollars and 13 cents, the principal paid is 342 dollars and 44 cents, the interest paid is 28 dollars and 69 cents, and the balance is 4,278 dollars and 98 cents.
After two years, how much has been paid into interest?
a.
$4,628.14
b.
$1,246.10
c.
$978.96
d.
$1,912.05

Answer 1

Total paid in 24 months = 371.13 × 24 = 8,907.12
Principal repaid = 11,940.00 − 4,278.98 = 7,661.02
Interest paid = 8,907.12 − 7,661.02 = 1,246.10

Answer: b. $1,246.10