Finance
A Maine homeowner has a 30-year, $200,000 mortgage at 7% with a monthly P&I payment of $1,331. After 10 years, approximately what percentage of each payment goes to principal?
AThe same percentage as in year 1
BA higher percentage than in year 1, as the loan amortizes✓ Correct
CA lower percentage than in year 1
DExactly 50%
Explanation
As a mortgage amortizes, more of each payment goes toward principal over time. Early in the loan, most of the payment covers interest; later, the principal portion increases.
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