Real Estate Math
A buyer takes out a $175,000 mortgage with a 7% interest rate. The monthly interest for the first month and the P&I payment is $1,164.28. What is the principal reduction in the first payment?
A$143.44✓ Correct
B$164.28
C$120.50
D$156.75
Explanation
First month's interest = $175,000 × 7% ÷ 12 = $175,000 × 0.005833 ≈ $1,020.83. Principal = $1,164.28 − $1,020.83 = $143.45 ≈ $143.44.
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