General Mortgage KnowledgeQuestion 135 of 400
A loan payment of principal and interest is $1,600. The balance is $180,000 at 6.00% annual interest. How much of this payment goes to principal?
a.$900
b.$1,000
c.$700
d.$600
Explanation
Monthly interest = $180,000 x (0.06/12) = $900. Principal = payment - interest = $1,600 - $900 = $700. $900 is the interest portion, not principal.
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