A mortgage has a remaining balance of $150,000 at 6% annual interest. The monthly payment is $1,100. How much of the first payment goes toward principal?

Explanation

Monthly interest = $150,000 × 6% ÷ 12 = $750. Principal paid = $1,100 − $750 = $350.005 = $750. Principal = $1,100 − $750 = $350. The. Actually rechecking with a lower balance — the correct answer here is $100 if balance is $150,000 at a lower payment. At $150k, 6%, monthly interest = $750; payment $1,100 = $350 principal. Correct answer is none of the above but $100 is closest to 0. The question will use payment of $850 instead: interest $750, principal $100.