Math 201

I am having problems with this question in my math class.
Consider a student loan of ​$25,000.00 at a fixed APR of 12% for 25 years.

a. Calculate the monthly payment. The monthly payment is $263.31
b. Determine the total amount paid over the term of the loan. This is $78,993.00
c. Of the total amount​ paid, what percentage is paid toward the principal and what percentage is paid for interest.
I am not sure how to figure out the percentage paid toward the principal and what percentage is paid for interest.

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  1. I agree with your first two answers.

    The third question makes no "actuarial mathematical" sense.
    The closest I would guess is :
    78,993.00 - 25000 = 53993
    rate = interest/(principal x time) = 53993/(25000(25)) = .0863
    so 8.63 % ??

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  2. I got the question wrong so they gave me the answer and I have another chance to answer a similiar question. The percentage toward the principal is 31.6, toward interest it is 68.4. I can't figure out how they got the percentages.

    This is my new question
    Consider a student loan of ​$22,500.00 at a fixed APR of 12​% for 15 years.
    a. Calculate the monthly payment.
    b. Determine the total amount paid over the term of the loan.
    c. Of the total amount​ paid, what percentage is paid toward the principal and what percentage is paid for interest.

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  3. I see what they did.
    percentage interest = interest/total paid
    = 53993/78,993 = .6835...
    or appr 68.4%
    so the principal percentage = 100%-68.4% = 31.6%

    What formula were you using to get the first two answers?
    Hint: This is a "present value of an annuity" type of question.

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  4. Thank you so much. I went online and I did it with an online calculator. I have been out of school for 15 years and the formulas confuse me so much.

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  5. Thank you again for your help. I now know how to do these problems and I got the other one right. I may have many more questions.

    Thank you,
    Stephanie

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  6. yes

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