Suppose you have taken out a $200,000 fully-amortizing fixed rate mortgage loan that has a term of 15 years and an interest rate of 4.25%. In month 2 of the mortgage, how much of the monthly mortgage payment does the principal repayment portion consist of?
A) $705.51
B) $708.33
C) $796.22
D) $799.04

Question

Quizplus · Accepted Answer

The monthly mortgage payment is calculated using the formula for a fixed-rate mortgage. In month 2, the principal portion is calculated by subtracting the interest portion from the total monthly payment. The interest portion is based on the remaining balance after the first payment.

Suppose You Have Taken Out a $200,000 Fully-Amortizing Fixed Rate