document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1118851>Question 1118851</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers different from those presented here. For long-term loans, the differences may be pronounced. \r<BR>\n" );
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document.write( " Assume that you take out a $4000 loan for 30 months at 7% APR. How much of the first month's payment is interest? (Round your answer to the nearest cent.)  </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #734289 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=734289\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> the loan is 4000 for 30 months at 7% apr.\r<BR>\n" );
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document.write( "the payment required per month would be 145.727629 per month.\r<BR>\n" );
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document.write( "the first payment is at the end of the first month.\r<BR>\n" );
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document.write( "the remaining balance at the beginning of the first month is 4000.\r<BR>\n" );
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document.write( "at the end of the first month, the interest is .07/12 * 4000 = 23.333333333.\r<BR>\n" );
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document.write( "the payment of 145.727629 is then made.\r<BR>\n" );
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document.write( "the principal part of the payment is 145.727629 - 23.3333333 = 122.3942957.\r<BR>\n" );
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document.write( "the remaining balance at the end of the first month is 4000 - 122.3942957 = 3877.605704.\r<BR>\n" );
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document.write( "as the number of months progress, the interest part is less and less and the principal part is more and more.\r<BR>\n" );
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document.write( "this can be seen in the following excel spreadsheet printout.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2018/062001.jpg\" alt=\"$$$\" ><BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2018/062002.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "i used the TI-BA-II financial calculator to determine what the monthly payment needed to be.\r<BR>\n" );
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document.write( "i entered:\r<BR>\n" );
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document.write( "present value = 4000<BR>\n" );
document.write( "future value = 0<BR>\n" );
document.write( "payment is made at the end of the time period.<BR>\n" );
document.write( "interest rate per time period is 7/12 = .58333333333.....<BR>\n" );
document.write( "number of time periods = 30\r<BR>\n" );
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document.write( "i then had the calculator tell me what the required payment was.\r<BR>\n" );
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document.write( "the calculator said the required payment was 145.727629 at the end of each month.\r<BR>\n" );
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document.write( "you can see from the excel printout that the remaining balance at the end of the 30 month loan period is 0, as it should be.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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