Question

A borrower obtains a fully amortized mortgage loan for $165,000 at an interest rate of 6.5% for 30 years. The monthly payments are $1,044.45. What is the balance of the principal after the first month's payment?

Answer 1

To find the balance of the principal after the first month's payment, subtract the principal portion from the remaining principal.

Step-by-step explanation:

To find the balance of the principal after the first month's payment, we can calculate the remaining principal amount. Let's break it down step by step:

1. Subtract the monthly payment ($1,044.45) from the remaining principal to find the interest portion: $165,000 * 6.5% / 12
2. Subtract the interest portion from the monthly payment to find the principal portion: $1,044.45 - interest portion
3. Subtract the principal portion from the remaining principal to get the new balance

By repeating this process for each month, we can determine the principal balance after any given payment.