Assess a mortgage payment schedule such as http://realestate.yahoo.com/calculators/amortization.html. Assume a loan amount of $120,000, an interest rate of 7.4 percent, and a 30-year maturity. Given this information, what is the monthly payment? In the first month, how much of the monthly payment is interest, and how much is principal? What is the outstanding balance after the first year? In the last month of payment, how much of the monthly payment is interest, and how much is principal? Why is there such a difference  in the composition of the principal versus interest payment over time?