Question

What is the balance on an amortized loan of $110,000 after the first payment if the interest rate is 5.5% with a monthly P&I payment of $568?

Answer 1

The interest due on the first payment is
.. I = Prt
.. I = 110,000*.055*(1/12)
.. I = 504.17

Then the decrease in principal resulting from the first payment is
.. 568.00 -504.17 = 63.83
and the new balance is
.. $110,000.00 -63.83 = $109,936.17