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7 August, 22:06

Renata has a home loan for $150,000 at 7.5% interest for 30 years and her payment is $987.00 per month (including principal and interest). What is the principal balance after Renata has made one payment on her loan? After two payments?'

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  1. 7 August, 22:14
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    First payment=$149,950.50

    Second payment=$149,901

    Explanation:

    Annual amount of interest paid=$150,000*7.5%

    =$150,000*0.075

    =$11,250 per annum

    monthly interest = annual interest / 12

    =$11,250/12

    =$937.50

    As given,

    Principal & interest payment=$987

    Monthly principal payment = principal & interest payment - monthly interest

    =$987-$937.50

    =$49.50

    First month payment = original loan - monthly principal payment

    =$150,000-$49.50

    =$149,950.50

    Second month payment = first month payment - monthly principal payment

    =$149,950.50-$49.50

    =$149,901
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