A house has a $298,500.00 mortgage at 7.5%. The monthly payments are $2,770.08. Compute an
Amortization schedule for the first three months.

Question

Quizplus · Accepted Answer

To create an amortization schedule for the first three months, we need to calculate the interest and principal portions of each payment. Here are the calculations for the first three months:

Month 1:
Interest = (0.075/12) * $298,500.00 = $1,490.63
Principal = $2,770.08 - $1,490.63 = $1,279.45
Balance = $298,500.00 - $1,279.45 = $297,220.55

Month 2:
Interest = (0.075/12) * $297,220.55 = $1,481.10
Principal = $2,770.08 - $1,481.10 = $1,288.98
Balance = $297,220.55 - $1,288.98 = $295,931.57

Month 3:
Interest = (0.075/12) * $295,931.57 = $1,471.54
Principal = $2,770.08 - $1,471.54 = $1,298.54
Balance = $295,931.57 - $1,298.54 = $294,633.03

This matches the information provided in option C.

A House Has a $298,500