Answered

Borrower Kathy has a starting balance of $150,000 at the beginning of January. She is being charged at 3.25% interest. Her total monthly payment for combined principal and interest is $640.50. How much of the first payment is the principal?
1) $640.50
2) $844.64
3) $406.25
4) $234.25

Answer :

Answer:

4) $234.25

Explanation:

First, we have to find out the monthly interest payment which is shown below:

= (Starting balance of January month × interest rate) ÷ total number of years in a year

= ($150,000 × 3.25%) ÷ 12 months

= $406.25

The total monthly payments is $640.50

So, the first payment would be

= Total monthly payments - monthly interest payment

= $640.50 - $406.25

= $234.25

Other Questions