On June 1,you borrowed $220,000 to buy a house.The mortgage rate is 8.25 percent.The loan is to be repaid in equal monthly payments over 15 years.The first payment is due on July 1.How much of the second payment applies to the principal balance? (Assume that each month is equal to 1/12 of a year.)

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The monthly payment can be calculated using the formula for an amortizing loan. The interest portion of the first payment is $220,000 * (8.25% / 12), and the rest goes to the principal. The second payment's principal portion is slightly higher as the principal balance decreases.

On June 1,you Borrowed $220,000 to Buy a House