# Approximately how much of the first payment will be interest for a $259,000, thirty year... ## Question: Approximately how much of the first payment will be interest for a$259,000, thirty year mortgage, 3.42% APR, annual payments?

A.) $13,941.38 B.)$11,421.90

C.) $9,753.65 D.)$8,857.80

## Interest

Interest refers to the incurred charges (gain) of a certain sum of money which is borrowed or invested. Interest is consider as the price of money as it is the corresponding cost in acquiring such level of capital.

## Answer and Explanation:

Formula on calculating the interest payment in a period.

{eq}Interest=Balance*Interest~rate\\ {/eq}

In this case, the balance would be 259,000 since it ask for the interest paid of the first payment. {eq}\begin{align*} Interest&=259,000*.0342\\ &=8,857.80 \end{align*} {/eq} The total amount paid to the loan's interest on its first payment is D.8,857.80

#### Learn more about this topic:

How to Calculate Interest Expense: Formula & Example

from Financial Accounting: Help and Review

Chapter 5 / Lesson 18
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