What is wrong with my simple interest on my mortgage?
I have a loan that I have 8 payments so far. The original loan amount was $ 139,650 at a simple interest rate of 8.5%. Interest accrues on an annual basis. The Bank calculates my monthly payment to $ 1,130 / month. Ok, so I am always willing to sell the house, and I call to ask the bank how much I still owe on the house. They tell me $ 139,400. Only $ 250, I’m going to pay 8 payments of $ 1,130 (ie $ 9,040) paid! I = PRT I = 139,650 $ * 0.085 * 1 = $ 11,870.25 in interest this year: I made this calculation. $ 11,870.25 / 12 = $ 989.19 per month interest. This should mean that I pay $ 1130 – $ 989.19 = $ 140.81 per month in principle, which is about $ 1.125 in 8 payments! So why did I only paid $ 250 for the principle? What I miss here?