Question

Kate and Ashton have been approved for a $200,000 15 year mortgage with an APR of 5.5%. How much of their first monthly payment will go to intrest?

Answer 1

$920 would be the amount of interest in the first payment.

We convert the decimal to a monthly amount first. (5.5/100)/12 = 0.0046. We then multiply this by the amount of the loan, 200,000:

200000*0.0046 = 920.

$920 of the first month's payment would go towards interest.

To find the percentage of the payment, you would divide this amount by the amount of the first month's payment.