Your parents are buying a house for $187,500. they have a good credit rating, are making a 20% down payment, and expect to pay $1,575/month. the interest rate for the mortgage is 4.65%. how much interest is accrued at the end of the second month?

Total interest accrued during the first two months is $ 1,157.65

What is interest?

The interest is the amount that is gained by the loan.

Your parents are buying a house for $187,500.

They have a good credit rating, are making a 20% down payment, and expect to pay $1,575/month.

The interest rate for the mortgage is 4.65%.

Sale price = $187,500

Downpayment = 0.2*187500 = $37,500

Loan amount = 187500 - 37500 = $150,000

Interest rate = 4.65/12 = 0.3875% per month

Monthly payment = $1,574

AT the end of the first month, the outstanding amount will be

= loan × interest rate - monthly payment

= 150000 × 1.003875 - 1574

= $ 149,006.25

Interest accrued during the first month

= 150000 × 0.003875

= $ 581.25

Interest accrued during the second month

= outstanding amount at the end of the first month × 0.003875

= 149006.25 × 0.003875

= $ 577.4

Total interest accrued during the first two months will be

= 581.25 + 577.40

= $ 1,157.65

More about the interest link is given below.

link

Sale price = 187500
20% down = 0.2 * 187500 = 37500
Loan amount = 187500-37500 = 150000
Interest = 4.65%/12 per month
Monthly payment = $1575
At the end of the first month, outstanding amount
= loan * interest rate - monthly payment
= 149006.25

Interest accrued during the first month
=150000*0.0465/12
= 581.25

Interest accrued during the second month
= outstanding amount at the end of the first month * (0.0465/12)
= 577.40

Total interest accrued during the first two months
= 581.25+577.40
= 1158.65 (to the nearest cent)

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