Finance
A Missouri borrower has a 30-year fixed mortgage at 6% on a $200,000 loan. If they pay $1,199 per month, approximately how much of the first payment is interest?
A$600
B$800
C$1,000✓ Correct
D$1,199
Explanation
First month's interest = $200,000 × 6% ÷ 12 = $200,000 × 0.005 = $1,000. The remaining $199 reduces principal. Early payments are predominantly interest.
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