Answer:
Option (d) is correct.
Explanation:
Given that,
Note value = $200,000
Rate of interest = 5%
Time period = 6 years
Monthly payment = $3,220.99
Interest amount in the first month:
= Note value × Rate of interest × Time period
= $200,000 × 5% × (1 ÷ 12)
= $200,000 × 0.05 × 0.0833
= $833.33
First Month's principal amount:
= Monthly payment - Interest amount
= $3,220.99 - $833.33
= $2,387.66
Carrying value will be decrease when the first month's payment is made is $2,387.66.
