Explanation:

For a fixed-rate mortgage:

Monthly interest rate = 3.60% / 12 = 0.30% = 0.003
First month's interest = $140,000 × 0.003 = $420.00
Monthly payment is approximately: $PMT = \frac{140{,}000 \times 0.003}{1-(1.003)^{-360}} \approx 636.4$
Principal component of the first payment = Payment − Interest $636.4 - 420.0 \approx 216.4$

So the nearest answer is $216.50.

Q-508.2. Which is nearest to the principal component of the first monthly payment on a 30-year fixed rate mortgage (FRM) with an original balance of `$140`,000 when the interest rate is 3.60%?

Exam-Like

Community

MManit

Last updated: April 18, 2026 at 11:32

a) $39.00

33.3%

b) $216.50

66.7%

c) $420.00

d) $636.50

Financial Risk Manager Part 1