Borrower Kathy has a starting balance of $150,000 at the beginning of January. She is being charged at 3.25% interest. Her total monthly payment for combined principal and interest is $640.50. How much of the first payment is the principal?

1) $640.50

2) $844.64

3) $406.25

4) $234.25

Question

Business

Simon Shelton

4 January, 16:53

Borrower Kathy has a starting balance of $150,000 at the beginning of January. She is being charged at 3.25% interest. Her total monthly payment for combined principal and interest is $640.50. How much of the first payment is the principal?

1) $640.50

2) $844.64

3) $406.25

4) $234.25

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Answers (1)

Know the Answer?

Mia Park · Answer 1

4) $234.25

Explanation:

First, we have to find out the monthly interest payment which is shown below:

= (Starting balance of January month * interest rate) : total number of years in a year

= ($150,000 * 3.25%) : 12 months

= $406.25

The total monthly payments is $640.50

So, the first payment would be

= Total monthly payments - monthly interest payment

= $640.50 - $406.25

= $234.25

Borrower Kathy has a starting balance of $150,000 at the beginning of January. She is being charged at 3.25% interest. Her total monthly payment for combined principal and interest is $640.50. How much of the first payment is the principal?1) $640.502) $844.643) $406.254) $234.25

Borrower Kathy has a starting balance of $150,000 at the beginning of January. She is being charged at 3.25% interest. Her total monthly payment for combined principal and interest is $640.50. How much of the first payment is the principal?

1) $640.50

2) $844.64

3) $406.25

4) $234.25