Question

Mathew bought a home for $245,000 using a 20% down payment. He obtained a 30-year fixed-rate mortgage at six percent (6%)for the remainder of the funds. His monthly principal and interest payment is $1175.12. What will the principal balance on the mortgage be after the second payment is made?

Answer 1

Answer:

Principal Balance at the end of the second payment or year:

$198,350.24

Explanation:

Schedule

    start principal  start balance   interest end balance end principal

1    $196,000.00  $196,000.00  $11,760.00 $208,935.12 $197,175.12

2   $197,175.12    $208,935.12   $12,536.11 $222,646.35 $198,350.24

Cost of Home  =      $245,000

less down payment  = 49,000 (20% of $245,000)

Starting principal =  $196,000