\begin{tabular}{|l}\hline You decide to borrow \( \$ 26,000 \) to put in a new swimming pool. You obtain a loan for 30 \\ years, making equal monthly payments. After how many years will the greatest amount of \\ your payment be going toward interest? \\ \hline\( \square 25 \) years \\ \( \square 29 \) years \\ \( \square 5 \) years \\ \( \square 1 \) year \\ \hline\end{tabular}

When you take out a loan for a large amount, like for a swimming pool, the structure of amortization ensures that early on, a greater portion of your monthly payments covers interest rather than principal. Typically, in a standard 30-year mortgage, the tipping point at which you start paying more towards the principal than interest usually occurs after about 5-7 years. So, if you're looking to determine when the majority of your payment is going toward interest, you can expect this to occur primarily during the initial years of the loan. As you proceed through the repayment schedule, every month, the interest you pay shrinks while the amount reducing your principal increases. If you're keen to keep tabs on this, examining a loan amortization table can be quite revealing about how the balance shifts over time. Watch out for the sweet spot when your payments start working more for you than the bank!