Real Estate Math
A 30-year loan of $150,000 at 6% has a monthly P&I payment of $899.33. After 10 years, approximately what percentage of each payment is principal?
AAbout the same as the first payment
BMore than in the first year — amortization shifts more toward principal over time✓ Correct
CLess than in the first year
DExactly 50% principal and 50% interest after 10 years
Explanation
In standard amortization, early payments are mostly interest. Over time, as the balance decreases, each payment contains a larger principal component and a smaller interest component.
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