Finance
A Maine property is purchased with a 30-year fixed-rate mortgage at 6%. After 5 years of payments, the remaining balance is approximately $272,000. The homeowner has paid approximately how much principal in 5 years on a $280,000 loan?
A$4,000
B$8,000✓ Correct
C$16,000
D$28,000
Explanation
Principal paid = Original balance − Remaining balance = $280,000 − $272,000 = $8,000. In the early years of a mortgage, most payments go toward interest, with only a small portion reducing principal.
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