Question

Your parent’s mortgage is $231,450 at a 4.65% APR. If they pay $2,236 toward the mortgage each month, how much of the second month's payment is applied toward the second month's principal? $1,344.32 $1,339.13 $4,437.34 $2,678.26

Answer 1

The principle applied for second month payment is $1,339.13

B is correct

Explanation:

Mortgage value = $231,450

APR = 4.65%

Monthly Payment = $2,236

First month interest of $231,450 of APR 4.65%

Interest
`=231450* (0.0465)/(12)`

Interest of first month = $896.87

Monthly payment = $2,236

Second month's payment is applied toward the second month's principal

= Monthly Payment - First month Interest

= 2236 - 896.87

= 1339.13

Hence, The principle applied for second month payment is $1,339.13