A mortgage loan of $132,000 at 6% compounded semi-annually is to be amortized over 25 years equal monthly payments. How much interest will be included in the first payment?

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The interest for the first payment is calculated using the formula: Interest = Principal x (annual interest rate / number of compounding periods per year). Here, the principal is $132,000, the annual interest rate is 6%, and the compounding is semi-annual, so the interest rate per period is 3%. The interest for the first payment is $132,000 x 0.03 = $3,960 annually, or $3,960 / 12 = $330 monthly. However, since the interest is compounded semi-annually, the effective monthly interest rate is slightly higher, leading to an interest amount of approximately $652 for the first payment.

A Mortgage Loan of $132,000 at 6% Compounded Semi-Annually Is