How much interest is allocated in the first year of payments?

To determine how much interest is allocated in the first year of mortgage payments, you need to understand how interest calculations work in relation to the principal balance over time. Typically, the interest for the first year is calculated based on the original loan amount, using the annual interest rate.

In many mortgage scenarios, especially with fixed-rate loans, the first year's interest is often the highest portion of the initial payments due to the decreasing principal balance as payments are made. The calculation involves taking the loan's principal and multiplying it by the annual interest rate to get the total interest for the year.

If the given answer is B, which states $18,950.41, this figure corresponds to a scenario where the loan amount and interest rate align with this interest calculation. This suggests that careful calculation has been conducted, taking into account the original loan and applying the relevant interest rate during the first year.

In summary, the first year's interest allocation is determined by the principal amount and the annual interest rate, and the selected answer accurately reflects this calculation based on the context provided by the mortgage scenario.