Question

Amber obtained a 30-year, $260,000 loan for her new home. The interest rate is 3.8% and her monthly payment is $1,211.49. How much of the first payment is for principal?

Answer 1

$388.16

Explanation:

Her monthly interest rate is 3.8%/12, so the amount of interest due on the first payment is ...

$260,000 × 0.038/12 ≈ $823.33

Then the amount applied to the principal is ...

$1211.49 -823.33 = $388.16