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?'

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