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25 February, 12:34

You obtain a 20 year mortgage for $150,000 with a 6% interest rate. Your yearly mortgage payment is $13,078. When the first loan payment is made what is the amount applied to the Principal, and what is the new loan balance? g

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  1. 25 February, 13:37
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    The amount that is applied to the Principal is $4,078, while the new loan balance is 145,922.

    Explanation:

    First loan payment = $13,078

    First interest payment = $150,000 * 6% = $9,000

    First principal payment = First loan payment - First interest payment = $13,078 - $9,000 = $4,078

    New loan balance = Total loan amount - First principal payment = $150,000 - $4,078 = 145,922

    Therefore, the amount that is applied to the Principal is $4,078, while the new loan balance is 145,922.
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