Answer: $824.73
Step-by-step explanation:
The 5.5% payment will be divided between the interest payment and a principal deduction to reduce the debt balance.
APR = 26.2%/12 = 0.0218
<u>Month 1 </u>
Payment = 5.5% * 943.85 = $51.91
Interest = 0.0218 * 943.85 = $20.61
Balance after Principal Deduction = 943.85 - ( 51.91 - 20.61)
= $912.55
<u>Month 2</u>
Payment = 5.5% *912.55 = $50.19
Interest = 0.0218 * 912.55 = $19.92
Balance after Principal Deduction = 912.55 - ( 50.19 - 19.92)
= $882.28
<u>Month 3</u>
Payment = 5.5% *882.28 = $48.53
Interest = 0.0218 * 882.28 = $19.26
Balance after Principal Deduction = 882.28 - ( 48.53 - 19.26)
= $853.02
<u>Month 4</u>
Payment = 5.5% * 853.02 = $46.92
Interest = 0.0218 *853.02 = $18.62
Balance after Principal Deduction = 853.02 - ( 46.92 - 18.62)
= <u>$824.73</u>
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Balance at end of month 4 is beginning balance for month 5.
