Question

You have a $212,000 mortgage at 7.2% APR. Each month you pay $2200.00 towards your mortgage. How much of the mortgage is applied to JUST PRINCIPAL? (Do not include any taxes/insurance)(1 point)
Responses

$2200.00
$2200.00
$1272.00
$1272.00
$911.60
$911.60
$928.00

Answer 1

To determine how much of the $2,200 monthly mortgage payment is applied to just the principal, we first need to calculate the monthly interest on the mortgage.

1. **Calculate the monthly interest rate**:
- The annual interest rate (APR) is 7.2%, so the monthly interest rate is:
\[
\text{Monthly Interest Rate} = \frac{7.2\%}{12} = \frac{0.072}{12} = 0.006
\]

2. **Calculate the monthly interest payment**:
- The interest for the first month can be calculated as follows:
\[
\text{Monthly Interest} = \text{Mortgage Amount} \times \text{Monthly Interest Rate}
\]
\[
\text{Monthly Interest} = 212,000 \times 0.006 = 1,272
\]

3. **Determine how much of the payment goes to principal**:
- Subtract the interest from the total payment to find the amount going towards the principal.
\[
\text{Principal Payment} = \text{Total Payment} - \text{Monthly Interest}
\]
\[
\text{Principal Payment} = 2,200 - 1,272 = 928
\]

Therefore, the amount applied to just principal is \( \boxed{928.00} \).