Your freind wants to borrow $1,137.45 from your credit card that charges a 14.7% APR you agree to the loan but require your freind to pay the interest of 3.6% APR on the loan and your freind agrees your freind pays you 200.00 at the end of the first month how much good toasts the principal
To calculate the monthly interest and principal payments, we need to determine the interest rate for the loan. In this case, your friend agreed to pay interest at a rate of 3.6% APR. To convert this to a monthly rate, divide it by 12:
Interest Rate = 3.6% / 12 = 0.3% per month (in decimal form)
Now, we can calculate the interest payment for the first month:
Interest Payment = Principal Amount x Monthly Interest Rate
Interest Payment = $1,137.45 x 0.3% = $3.41 (rounded to two decimal places)
Your friend will pay you $200.00 at the end of the first month, so we subtract the interest payment to determine how much will go towards the principal:
Principal Payment = Payment - Interest Payment
Principal Payment = $200.00 - $3.41 = $196.59 (rounded to two decimal places)
Therefore, your friend will have repaid $196.59 of the principal amount.
After one month:
Interest on credit card loan = (14.7/12)% * $1,137.45 = $13.24
Interest on friend's loan = (3.6/12)% * $1,137.45 = $3.42
Total interest charged = $13.24 + $3.42 = $16.66
Amount paid by friend = $200.00
Net increase in principal = $200.00 - $16.66 = $183.34
Therefore, the new principal is:
$1,137.45 + $183.34 = $1,320.79