Real Estate Math

An Alaska property has a loan balance of $180,000. Monthly principal and interest payment is $1,250. Of that, $900 is interest. How much is applied to principal reduction?

A$250
B$350✓ Correct
C$450
D$900

Explanation

Principal payment = Total payment − Interest portion. $1,250 − $900 = $350 applied to principal. Using the values given ($180,000, $1,250), apply the appropriate formula.. The correct answer is $350.. This is a common calculation on the Alaska real estate exam.

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