Answer-first summary for fast verification
Answer: b) $216.50
For a fixed-rate mortgage: 1. Monthly interest rate = 3.60% / 12 = **0.30% = 0.003** 2. First month's interest = $140,000 × 0.003 = **$420.00** 3. Monthly payment is approximately: \[ PMT = \frac{140{,}000 \times 0.003}{1-(1.003)^{-360}} \approx 636.4 \] 4. Principal component of the first payment = Payment − Interest \[ 636.4 - 420.0 \approx 216.4 \] So the nearest answer is **$216.50**.
Author: Manit Arora
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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%?
A
a) $39.00
B
b) $216.50
C
c) $420.00
D
d) $636.50
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