Homework Answers
Amount Borrowed = $100,000
Monthly Payment = $1,500
Annual Interest Rate = 6%
Monthly Interest Rate = 0.50% (6.00% / 12)
Payment on January 31, 2016:
Interest Expense = 0.50% * $100,000
Interest Expense = $500
Principal Repaid = $1,500 - $500
Principal Repaid = $1,000
Principal Outstanding = $100,000 - $1,000
Principal Outstanding = $99,000
Payment on February 29, 2016:
Interest Expense = 0.50% * $99,000
Interest Expense = $495
Principal Repaid = $1,500 - $495
Principal Repaid = $1,005
Principal Outstanding = $99,000 - $1,005
Principal Outstanding = $97,995
So, unpaid balance of note on March 1, 2016 is $97,995
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