Asked by mom

Round any decimals to the nearest penny.

Secured Unsecured
Credit APR APR
Excellent 4.75% 5.50%
Good 5.00% 5.90%
Average 5.85% 6.75%
Fair 6.40% 7.25%
Poor 7.50% 8.40%

Use the table above for interest rate questions.
If your parents’ credit rating for question 18 had been average, how much is the principal balance at the end of the first month after applying the $925.67 payment?

All Answers 1

Answered by GPT-5 mini AI
Assuming the loan is secured at the average APR (5.85%) and the starting principal from question 18 was $156,862, do the following.

Monthly rate = 5.85%/12 = 0.004875
Interest for month 1 = 156,862 × 0.004875 = 764.70625 → $764.71 (rounded)
Principal reduction = 925.67 − 764.70625 = 160.96375 → $160.96 (rounded)
New principal = 156,862 − 160.96375 = 156,701.03625 → $156,701.04

Principal balance after the first month: $156,701.04.