51. A mortgagor is making a monthly payment of $2,412.50 on a fixed-rate 15-year loan. The escrow portion includes the monthly insurance cost of $120.00 and the taxes of $212.25. The interest rate on the loan is 5.25%, and there is no mortgage insurance premium. What is the principal and interest portion of the payment?
Answer: A
The principal and interest portion of the payment is $2,080.25.
To determine the principal and interest portion of the monthly payment, we subtract the escrow amounts for insurance and taxes from the total monthly payment. This results in a principal and interest payment of $2,080.25.
A) 2080.25
This option is correct as it accurately reflects the principal and interest portion of the monthly payment after deducting the escrow amounts for insurance and taxes from the total payment of $2,412.50.
B) 2200.00
This option is incorrect because it does not account for the specific deductions from the total monthly payment. Subtracting the escrow amounts from the total payment clearly shows that the principal and interest portion is lower than $2,200.00.
C) 2292.50
This option is also incorrect as it overestimates the principal and interest portion. The correct calculation shows that the amount should be significantly lower than $2,292.50 after accounting for the insurance and tax deductions.
D) 2412.50
This option is incorrect because it does not consider the deductions for insurance and taxes. The total monthly payment includes these amounts, and thus the principal and interest payment is less than the full payment of $2,412.50.
Conclusion
The principal and interest portion of the payment is definitively $2,080.25, as calculated by subtracting the escrow amounts from the total monthly payment. All other options fail to accurately reflect this calculation, either by being too high or not considering the necessary deductions.