How much of a $2,042.71 monthly payment is applied to the principal if $1,145.83 is for interest?

To determine how much of the monthly payment is applied to the principal, you need to subtract the interest portion from the total payment amount. In this case, the total monthly payment is $2,042.71, and the interest payment is $1,145.83.

When you subtract the interest from the total payment:

$2,042.71 (total payment) - $1,145.83 (interest) = $896.88 (amount applied to principal).

This calculation shows that $896.88 of the monthly payment is allocated to the principal, making it the correct answer. Understanding this calculation is crucial because it helps clarify how monthly mortgage payments are structured, detailing how much goes towards interest versus the principal balance of a loan.