Given data:
Principal = $1500.00
Term Length = 4 years
Interest Rate = 6%
Monthly Payment = $35.00
Calculate the Monthly Interest Rate:
[tex]\frac{6\text{\%}}{12}=0.5\text{\%=0.005}[/tex]
Given that the 40th payment has $275 left in the principal, the amount that will go towards interest for this payment will be the product of the monthly interest rate and principal:
[tex]0.005\times275\text{ = 1.375}[/tex]
Therefore,
the amount that would go towards interest is approximately $1.38 [Option C]
