Real Estate Math

A South Carolina buyer is offered a 30-year, $300,000 mortgage at 7.5% with monthly payments of $2,097. The first payment interest portion is $1,875. How much principal is reduced in the first payment?

A$222✓ Correct
B$197
C$2,097
D$125

Explanation

Principal reduction = Monthly payment - Interest portion = $2,097 - $1,875 = $222. To solve this, multiply the relevant values: $300,000 and $2,097 at 7.5%.. The correct answer is $222.. This is a common calculation on the South Carolina real estate exam.

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