Questions: c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest? The percentage paid toward the principal is % and the percentage paid for interest is %. (Round to the nearest tenth as needed.)

c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest?

The percentage paid toward the principal is % and the percentage paid for interest is %.
(Round to the nearest tenth as needed.)

Transcript text: c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest? The percentage paid toward the principal is $\square$ \% and the percentage paid for interest is $\square$ \%. (Round to the nearest tenth as needed.)

Solution

Solution Steps

Step 1: Calculate the total amount paid

The individual makes monthly payments of $512 for 20 years. There are 12 months in a year, so the total number of payments is 20 years * 12 months/year = 240 months. The total amount paid is then $512/month * 240 months = $122,880.

Step 2: Calculate the total interest paid

The total interest paid is the difference between the total amount paid and the original principal amount. Interest = $122,880 - $66,000 = $56,880.

Step 3: Calculate the percentage paid toward the principal

The percentage paid toward the principal is calculated as (Principal / Total Amount Paid) * 100%. Percentage paid towards principal = ($66,000 / $122,880) * 100% ≈ 53.8%.

Step 4: Calculate the percentage paid for interest

The percentage paid for interest is calculated as (Interest / Total Amount Paid) * 100%. Percentage paid towards interest = ($56,880 / $122,880) * 100% ≈ 46.2%.