Interest Expense for Loan Calculation

Loan Details

  • Amount: $100,000
  • Term: 3 years
  • Interest Rate: 6%
  • Monthly Payment: $3,042

Interest Expense Calculation

  • First Month's Interest:
    • Formula: Total Amount ( \times ) Monthly Interest Rate
    • Monthly Interest Rate = Annual Rate / 12 = ( \frac{6\%}{12} = 0.5\% )
    • Amount: ( 100,000 \times 0.005 = 500 )

Conclusion

  • The amount recorded for interest expense for the first full month is $500.