Your mortgage is $135,400.00 at a 5.25% APR. If you pay $1,500.00 towards the mortgage each month, how much of your second month's payment is applied to the principal?

Hi there
The interest paid in the first month
135,400×0.0525×(1÷12)=592.38
The payment applied to the principle
1,500−592.38=907.62
Subtract the payment applied from the principle
135,400−907.62=134,492.38
Find the interest paid in the second month
134,492.38×0.0525×(1÷12)=588.40
Finally find the payment applied to the principle in the second month
1,500−588.40
=911.6....answer

Hope it helps

Answer Link

andromache andromache · Answer 2 · 2022-01-13T11:31:38+01:00

The second month's payment is applied to the principal is 911.60.

The calculation is as follows:

The interest paid in the first month

[tex]= 135,400\times 0.0525\times (1\div 12)[/tex]

=592.38

Now

The payment applied to the principle

= 1,500- 592.38

=907.62

Now

Subtract the payment applied from the principle

= 135,400- 907.62=

134,492.38

Now the interest paid in the second month

[tex]= 134,492.38\times 0.0525\times (1\div 12)[/tex]

=588.40

Finally the payment applied to the principle in the second month

= 1,500 - 588.40

=911.6

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