The reduction in principle of the 13th payment is 50% larger than the reduction in principle of the 5th payment. What is the total amount of interest paid on the loan

Complete Question:

A 20-year level repayment of a loan of 1000 has been scheduled. Recall that in such scenarios, as time progresses the reduction in principal part of each payment increases as the interest part of each payment decreases. The reduction in principle of the 13th payment is 50% larger than the reduction in principal of the 5th payment. What is the total amount of interest paid on the loan?

At an assumed interest rate of 6%, the Total Interest on the Loan is:

= $743.69

Explanation:

a) Data and Calculations:

Amount of loan = $1,000

Period of loan = 20 years

Assumed interest rate = 6%

Loan Amount  1000

Loan Term  

20  years  0  months

Interest Rate  6

Compound  

Annually (APY)

Pay Back  Every Year

Results:

Payment Every Year   $87.18

Total of 20 Payments   $1,743.69

Total Interest   $743.69

View Amortization Table

Principal 57%

Interest 43%

Amortization Schedule

 Beginning       Interest     Principal     Ending

        Balance                                              Balance

1      $1,000.00        $60.00       $27.18       $972.82

2       $972.82  $58.37      $28.82       $944.00

3       $944.00$56.64       $30.54       $913.46

4       $913.46         $54.81       $32.38       $881.08

5       $881.08        $52.86       $34.32       $846.76

6      $846.76          $50.81       $36.38       $810.38

7       $810.38          $48.62       $38.56       $771.82

8       $771.82          $46.31       $40.88       $730.94

9      $730.94         $43.86       $43.33       $687.61

10     $687.61          $41.26       $45.93       $641.69

11      $641.69         $38.50       $48.68       $593.00

12    $593.00        $35.58   $51.60      $541.40

13     $541.40        $32.48$54.70$486.70

14    $486.70        $29.20$57.98$428.71

15    $428.71         $25.72$61.46$367.25

16    $367.25        $22.04$65.15$302.10

17    $302.10           $18.13$69.06$233.05

18   $233.05          $13.98$73.20$159.84

19    $159.84          $9.59$77.59$82.25

20    $82.25           $4.93$82.25$0.00

answer; experimentation;