Question
Consider the following loan. Complete parts(a)-(c) below. An individual borrowed $72,000 at an APR of 5%, which will be paid off with monthly payments of
Consider the following loan. Complete parts(a)-(c) below.
An individual borrowed $72,000 at an APR of 5%, which will be paid off with monthly payments of $475 for 20 years.
a. Identify the amountborrowed, the annual interestrate, the number of payments peryear, the loanterm, and the payment amount.
The amount borrowed is $
72,000
72,000, the annual interest rate is
5
5%, the number of payments per year is
12
12, the loan term is
20
20 years, and the payment amount is $
475
475.
b. How many total payments does the loanrequire? What is the total amount paid over the full term of theloan?
There are
240
240 payments toward the loan and the total amount paid is $
114,000
114,000.
c. Of the total amountpaid, what percentage is paid toward the principal and what percentage is paid forinterest?
The percentage paid toward the principal is ......
% and the percentage paid for interest is
%.
(Round to the nearest tenth asneeded.)
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