Suppose you borrowed $15,000 at a rate of 8.5% and must repay it in 5 equal installments at the end of each of the next 5 years. By how much would you reduce the amount you owe in the first year.

The answer is $2,531.49 - but can someone explain to me how you get to $ 3806.49 for total payment in the work shown below? The rest of it makes sense. Thanks!

Accumulated Interest at the end of 1st year = 0.085*15000 = $1275 Principal Repayment = Total Payment - Accumulated Interest = 3806.49 - 1275 = $2531.49