Real Estate Math

A buyer financing $220,000 at 7% for 30 years has a monthly payment of $1,464. How much of the first payment is principal?

A$1,283
B$181✓ Correct
C$464
D$183

Explanation

Monthly interest (first payment) = $220,000 x 7% / 12 = $220,000 x 0.005833 = $1,283. Principal = Total payment - Interest = $1,464 - $1,283 = $181.

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