You have a mortgage at 11% for 30 years. The PI constant is $475 per month and the principal balance is $45,800. How much principal would be reduced with the first payment?

To determine how much principal would be reduced with the first payment, it's important to first understand how loan payments are allocated between interest and principal. In this case, you have a mortgage with an interest rate of 11% over 30 years. The payment constant is $475 per month, and the principal balance at the beginning is $45,800.

When the first payment of $475 is made, it primarily covers the interest accrued for the month and then any remaining amount contributes to reducing the principal. To find out how much interest accrues in the first month, you can use the formula for interest, which is:

Interest = Principal Balance × Monthly Interest Rate

The monthly interest rate is the annual rate divided by 12 months:

Monthly Interest Rate = 11% ÷ 12 = 0.91667% (approximately) or 0.0091667 when expressed as a decimal.

Next, applying this to the principal balance:

Interest for the first month = $45,800 × 0.0091667 ≈ $419.83

Now, the first payment of $475 is allocated as follows:

1. Pay the interest for the month: approximately $419.83

2. The remainder will go toward