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allochka39001
2 months ago
13

his morning, you borrowed $150,000 to buy a house. The mortgage rate is 7.35 percent. The loan is to be repaid in equal monthly

payments over 20 years. The first payment is due one month from today. How much of the second payment applies to the principal balance? (Assume that each month is equal to 1/12 of a year.)
Business
1 answer:
soldi70 [3.6K]2 months ago
5 0

Answer: 277.61 - option B

Explanation: A loan of $150,000 was taken.

It is a 20-year mortgage with an interest rate of 7.35 percent. Begin by dividing 0.0735 by 12 to obtain a monthly interest rate of 0.0061. Then, add 1 to 0.0061, resulting in 1.0061. The loan comprises 240 monthly payments since 20 years multiplied by 12 months gives that total. Raise 1.0061 to the power of -240 to yield 0.2323. Subsequently, subtract that from 1, giving you 0.7676. Finally, divide 0.0061 by 0.7676 to arrive at 0.007947, which when multiplied by $150,000 results in a monthly payment of $1192.

For the second payment, use 11 months instead of 12.

This results in: 277.61

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