Question

Colinda has just purchased her first home for $125,000. She put down a 20 percent down payment of $25,000 and took out a 4 percent mortgage for the rest. Her mortgage payment is $477 per month. How much of her first monthly mortgage payment is amortization?

Answer 1

Answer: $333 Interest and $144 Principal

To find the values for this payment, you will need to use an amortization calculator. If you were not given one, there are numerous ones online. 

Simply enter the amount of the loan $100,000. Then, the number of years, 30 is standard. Finally, enter the percent.

It will show you that the total payment is $477 and also the break down of the payment as given in the answer.

Answer 2

Answer:

The answer is $143.67

Step-by-step explanation:

Her mortgage is $125,000 minus the down payment of $25,000 or $100,000. The annual interest on a $100,000 mortgage at 4% is $4,000. This is equal to $4,000/12 = $333.33 per month. Her first monthly payment of $477 minus $333.33 equals $143.67 which is the amortization or the amount she pays above the interest which adds to her equity.