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March 25, 2017

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A $100,000, 30 year fixed rate mortgage at 8% interest has monthly principal and interest payments of $733.76. What is the loan balance after the first payment?

  • Real Estate Finance - ,

    1st Month:I = Po*r*t

    r = (8%/12) / 100% = 0.0066666 = Monthly
    % rate expressed as a decimal.

    t = 1 month.

    I = 100000*0.0066666*1 = $666.67.

    P = 733.76 - 666.67 = $67.09 = Amt applied to Po.

    Bal. = 100000 - 67.09 = $99,932.91.

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