What is the amount of an interest-only payment based on given data?

To determine the amount of an interest-only payment, you need to understand how interest calculations work. An interest-only payment is calculated by taking the principal amount of the loan and multiplying it by the interest rate, then dividing by the number of payment periods. This means that the borrower only pays the interest accrued over the period, with no reduction in the principal balance.

The correct answer results from applying the proper formula for calculating interest on the specific loan amount and interest rate provided in the question. Assuming you have the principal and the annual interest rate, you would convert the annual rate to a monthly rate and apply it to the principal. For example, if the principal was $100,000 and the interest rate was 5%, the monthly interest payment would be calculated as follows:

1. Convert the annual interest rate to a decimal: 5% = 0.05.

2. Calculate the monthly interest rate: 0.05 / 12 = 0.004167.

3. Multiply the principal by the monthly interest rate: $100,000 * 0.004167 = $416.67.

However, without knowing the exact numbers used in the question, the key factor in determining the correct answer comes down to the appropriate application of