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Interest portion of mortgage payment

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You have just taken out a 30 year, $120,000 mortgage on your new home. This mortgage is to be repaid in 360 equal monthly installments. If the stated (nominal) annual interest rate is 14.75 percent, what is the amount of the INTEREST portion of the FIRST monthly installment?
a. $1,475
b. $1,472
c. $1,493
d. $17,700
e. insufficient information to compute

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Solution Preview

You have just taken out a 30 year, $120,000 mortgage on your new home. This mortgage is to be repaid in 360 equal monthly installments. If the stated (nominal) annual ...

Solution Summary

Determines the amount of the INTEREST portion of the FIRST monthly installment.

$2.19