A $40,000 loan at 6.6% compounded monthly will be repaid by monthly payments over ten years. a.

Question:

A $40,000 loan at 6.6% compounded monthly will be repaid by monthly payments over ten years.
a. Calculate the interest component of Payment 35.
b. Calculate the principal component of Payment 63.
c. Calculate the reduction of principal in Year 1.
d. Calculate the reduction of principal in Year 10.