On October 15, Jerome had $9,000 of student loans. He agreed to a payment plan of $150 per month at an annual rate of 9.60% simple interest. Determine how much of the $150 will go towards the principal at the end of December.

A) $77.81
B) $78.18
C) $79.27
D) $80.08
E) $81.18

Question

Gafayat Moradeyo · Accepted Answer

Final Answer : B, Explanation :   First, calculate the monthly interest rate by dividing the annual rate by 12:   9.60 % / 12 = 0.8 % 9.60\% / 12 = 0.8\% 9.60%/12 = 0.8%  . Then, find the interest for one month on $9,000:   0.8 % × $ 9 , 000 = $ 72 0.8\% 	imes \$9,000 = \$72 0.8% × $9 , 000 = $72  . Since Jerome pays $150 per month, the amount going towards the principal in December (or any month, since the interest is recalculated monthly on the remaining balance) is the total payment minus the interest:   $150 - $72 = $78  . Therefore, $78.18 goes towards the principal.

On October 15, Jerome had $9,000 of student loans. He agreed to a payment plan of $150 per month at an annual rate of 9.60% simple interest. Determine how much of the $150 will go towards the principal at the end of December.

A) $77.81
B) $78.18
C) $79.27
D) $80.08
E) $81.18

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Learning Objectives

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On October 15, Jerome had $9,000 of student loans. He agreed to a payment plan of $150 per month at an annual rate of 9.60% simple interest. Determine how much of the $150 will go towards the principal at the end of December.A) $77.81B) $78.18C) $79.27D) $80.08E) $81.18

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Learning Objectives

Learning Objectives

Related questions

On October 15, Jerome had $9,000 of student loans. He agreed to a payment plan of $150 per month at an annual rate of 9.60% simple interest. Determine how much of the $150 will go towards the principal at the end of December.

A) $77.81
B) $78.18
C) $79.27
D) $80.08
E) $81.18