You just acquired a mortgage in the amount of $249,000 at 6.75% interest, compounded monthly. Equal payments are to be made at the end of each month for 30 years. How much of the first loan payment is interest? (Assume each month is equal to 1/12 of a year)

Question

You just acquired a mortgage in the amount of $249,000 at 6.75% interest, compounded monthly.  Equal payments are to be made at the end of each month for 30 years.  How much of the first loan payment is interest?  (Assume each month is equal to 1/12 of a year)

Reiny · Answer

good question.
must find the monthly payment.

i = .0675/12 = .005625 (I stored that in my calculator)
n = 12x30 = 360
let the payment be p

p(1 - 1.005625)^-360)/.005625 = 249000
p = 1615.01
first month interest = .005625(on full amount)
= 1400.63

so split-up of first payment:
interest = $1400.63
actual repayment of loan = $214.38