I am having problems with this question in my math class.

Question

Consider a student loan of ​$25,000.00 at a fixed APR of 12% for 25 years.

a. Calculate the monthly payment. The monthly payment is $263.31
b. Determine the total amount paid over the term of the loan. This is $78,993.00
c. Of the total amount​ paid, what percentage is paid toward the principal and what percentage is paid for interest.
I am not sure how to figure out the percentage paid toward the principal and what percentage is paid for interest.

Answer 1

I agree with your first two answers.

The third question makes no "actuarial mathematical" sense.
The closest I would guess is :
78,993.00 - 25000 = 53993
rate = interest/(principal x time) = 53993/(25000(25)) = .0863
so 8.63 % ??

Answer 2

I got the question wrong so they gave me the answer and I have another chance to answer a similiar question. The percentage toward the principal is 31.6, toward interest it is 68.4. I can't figure out how they got the percentages.

This is my new question
Consider a student loan of ​$22,500.00 at a fixed APR of 12​% for 15 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 3

I see what they did.
percentage interest = interest/total paid
= 53993/78,993 = .6835...
or appr 68.4%
so the principal percentage = 100%-68.4% = 31.6%

What formula were you using to get the first two answers?
Hint: This is a "present value of an annuity" type of question.

Answer 4

Thank you so much. I went online and I did it with an online calculator. I have been out of school for 15 years and the formulas confuse me so much.

Answer 5

Thank you again for your help. I now know how to do these problems and I got the other one right. I may have many more questions.

Thank you,
Stephanie

Answer 6

yes