Question

Blake took out a 20-year loan for $195,000 at 2.4% interest, compounded

monthly. If his monthly payment on the loan is $1023.84, how much of his
first payment went toward note reduction?
O A. $1023.84
O B. $390.00
C. $633.84
O D. $245.72

Answer 1

Answer: C. $633.84

Explanation:

The formula to solve this problem is shown below

monthly payment on the loan is $1023.84

i = 2.4% interest

= loan * interest period - monthly payment on the loan

= $195,000 *(2.4/100 /120) - $1023.84 = $195,000*(0.024/12) - $1023.84

= $633.84