Mortgage rate-payment applies to the principle balance

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On August 1, Gustavo Fring borrows $160,000 to buy a house. The mortgage rate is 7.5 percent. The loan is to be repaid in equal monthly payments over 30 years. The first payment is due on September 1. How much of the third payment applies to the principle balance? (Assume that each month is equal to 1/12 of a year.) Show Work.

a. $118.74 b. $120.23 c. $120.98 d. $356.22 e. $1000.00

Reference no: EM13769050

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