Question on interest

Question

I have a question about interest on a loan from a family member, and it is difficult figuring out.

I borrowed \$35,000 @ 3.5% in June, 2013, and here's the break down of the payments I've made:

June- \$0
July- \$0
August- \$1000
September- \$2000
October- \$2000
November- \$2000
December- \$2000
January- \$2000

= \$11,000 in payments over these 8 months.

Could you please tell me how much interest should be charged and what the balance should be? I'd greatly appreciate it.

Thank you

Answer 1

You want a table that looks something like this

Month       Start       Interest Payment End
June        35000       100.48     0    35100.48
July        35100.48    100.77     0    35201.25
August      35201.25    101.06  1000    34302.31
September   34302.31     98.48  2000    32400.79
October     32400.79     93.02  2000    30493.81
November    30493.81     87.54  2000    28581.35
December    28581.35     82.05  2000    26663.41
January     26663.41     76.55  2000    24739.96

with the amount outstanding at the start of each month equal to the amount at the start of the previous month plus monthly interest on that amount less any repayment.

Your version will depend on how you translate $3.5\%$ into a monthly interest rate (I used $1.035^{1/12}-1$ in the table above), whether repayments are at the start or end of a month, whether you charge interest in June, and what you do about rounding (see for example December).