The portion of the first month's mortgage payment meant for interest is $2,333.33
What is a mortgage?
Mortgage is a loan taken to acquire property which requires periodic interest payment such as monthly , semiannually or even annually.
First month interest=loan amount*annual interest rate/12
First month interest=$400,000*7%/12
First month interest=$2,333.33
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The interest in the first month's mortgage payment is $2,333.33.
The monthly mortgage interest can be determined using an online finance calculator that computes the monthly payment.
The payment schedule produced from the calculation shows the monthly payments classified according to interest and principal.
N (# of periods) = 360 (30 x 12)
I/Y (Interest per year) = 7%
PV (Present Value) = $400,000
FV (Future Value) = $0
Results:
PMT = $2,661.21
Sum of all periodic payments $958,035.59
Total Interest $558,035.59
Period PV PMT Interest FV
1 $400,000.00 $-2,661.21 $2,333.33 $-399,672.12
2 $399,672.12 $-2,661.21 $2,331.42 $-399,342.33
3 $399,342.33 $-2,661.21 $2,329.50 $-399,010.62
Thus, the interest in the first month's mortgage payment is $2,333.33.
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