Question

Airline accessories obtains a $100,000, three year loan, at 6% interest, with monthly payments of $3,042. what amount would be recorded for interest expense for the first full month?

Answer 1

Thee amount that would be recorded for interest expense for the first full month can be computed by first getting the reciprocal of the the time period, 36 months (3 years).Then this value was multiplied to the principal and the rate. 100,000 * 0.06 * 0.028 which gives us a value of $166.666 or $166.67