Real Estate Math

A buyer takes out a $250,000 mortgage with monthly payments of $1,600. The first month's interest is $1,250. How much principal is paid in the first month?

A$250
B$350✓ Correct
C$1,250
D$1,600

Explanation

Monthly payment = $1,600. Interest portion = $1,250. Principal portion = $1,600 – $1,250 = $350. Using the values given ($250,000, $1,600), apply the appropriate formula.. The correct answer is $350.. This is a common calculation on the Vermont real estate exam.

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