Real Estate Math

A mortgage has a remaining balance of $450,000. The next monthly payment is $2,700 and includes $450,000 × 6% ÷ 12 = $2,250 interest. How much principal is paid down?

A$2,700

B$450✓ Correct

C$2,250

D$225

Explanation

Monthly interest = $450,000 × 6% ÷ 12 = $2,250. Principal portion = Total payment - Interest = $2,700 - $2,250 = $450.

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