Question

A mortgage has a balance of $70,000 at 11.5% interest for a period of 25 years. The monthly P & I payment is $711.53, what is the interest charge for the second monthly payment?
a. $690.72
b. $711.53
c. $670.44
d. $40.70

Answer 1

The interest price for the second monthly charge is $670.44

$70,000 x 11.5% = $8,050, $8,050 ÷ 12 = $670.83,

$711.53 - $670.8 3= $40.70, $70,000 - $forty.70 = $sixty nine,959.30

$69,959.30 x 11.5% = $8,half.32

$8,1/2.32 ÷ 12 = $670.44

In finance and economics, interest is charge from a borrower or deposit-taking monetary institution to a lender or depositor of a quantity above compensation of the fundamental sum (that is, the amount borrowed), at a selected rate. it's miles awesome from a price that the borrower may also pay the lender or some 1/3 celebration.

Interest is the fee you pay to borrow money or the cost you charge to lend cash. a hobby is most often pondered as an annual percentage of the amount of a mortgage. This percent is called the hobby price on the loan. as example, a financial institution pays you interest when you deposit your money in a savings account.

There are basically three primary forms of interest costs: the nominal interest price, the effective charge, and the actual hobby rate. The nominal interest of an investment or mortgage is without a doubt the stated fee on which interest payments are calculated.

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