A woman borrows $1500, agreeing to pay $100 at the end of each month to reduce the outstanding principal and agreeing to pay the interest due on any unpaid balance at a rate of 12% per annum (i.e. 1% per month). Determine the sum of all interest payments.
It takes 15 months to pay off $1,500, @ $100 per month.
Interest of 1% () on OUTSTANDING BALANCE is also paid monthly.
For total interest paid over 15 months, we get the sum of an AP, which begins with a 1st interest payment of $140 $14 ($1,500 - 100) * .01 (1%),
and decreases by $10 $1 each month thereafter, for 15 months, with last being 0, since the remaining $100 will be paid then.
We then get:
Sum of 15 monthly interest payments, or
Thanks, Tutor @IKLEYN.
I hastily made the calculations and didn't realize that I calculated 10% interest i/o 1%. I've made the corrections. Thanks again!