Real Estate Math
A property has a mortgage balance of $200,000 at 5.4% annual interest. The monthly payment is $1,200. How much of the first payment reduces the principal?
A$300✓ Correct
B$400
C$500
D$600
Explanation
Monthly interest = $200,000 × 5.4% ÷ 12 = $200,000 × 0.0045 = $900. Principal reduction = $1,200 − $900 = $300.
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