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A conventional mortgage loan closed on July 1 for $165,000 at 3.75% interest amortized over 25 years at $857.06 per month. Using a 360-day year and interest paid in arrears, what would the principal amount be after the monthly payment was made August 1 ?
A. $164,936.30
B. $164,484.38
C. $164,142.94
D. $164,658.57

Sagot :

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Answer:

D. $164,658.57

Explanation:

Initial Borrowing = $165000

Annual Interest Rate = 3.75%

Monthly Payments = $ 857.06

Interest Accrued Between 1st July and 1st August = (30/360) * 0.0375 * 165000 = $516.625

Principal Repaid in first monthly payment = Monthly Repayment - Interest Accrued

= $857.06 - $515.625

= $341.435

Principal Outstanding post 1st Monthly Repayment = $165,000 - $341.435

= $164658.565

= $164658.57

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