You have a 25-year mortgage at 5% interest. The initial loan amount was $250,000. By how much did the principal decrease over the first 10 years of the loan? Payments are made monthly.

Question

Quizplus · Accepted Answer

Using an amortization schedule or loan calculator, we can calculate the remaining principal balance after 10 years of payments.

The remaining principal balance after the first 10 years is $185,811.

To calculate the decrease in principal, we subtract the remaining principal balance from the initial loan amount:

$250,000 - $185,811 = $64,189

Therefore, the answer is C) $65,189.

You Have a 25-Year Mortgage at 5% Interest