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Problem Walk$-$Through

payments she received during the year.

a$.$ What is the dollar amount of each payment Jan receives? Round your answer to the nearest cent.

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b$.$ How much interest was included in the first payment? Round your answer to the nearest cent.

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How much repayment of principal was included? Do not round intermediate calculations. Round your answer to the nearest cent.

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How do these values change for the second payment?

I. The portion of the payment that is applied to interest declines, while the portion of the payment that is applied to principal increases.

II$.$ The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to principal decreases.

IV$.$ The portion of the payment that is applied to interest declines, while the portion of the payment that is applied to principal also declines.

$V.$ The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to principal also increases.

c$.$ How much interest must Jan report on Schedule B for the first year? Do not round intermediate calculations. Round your answer to the nearest cent.

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Will her interest income be the same next year?

Her interest income will decline in each successive year.