Use the following chart to explain how the amount of principal affects the total cost of the loan

Explanation: In a part of the mortgage payment is dedicated to repayment of the principal balance.

In our  mortgage $100,000, The principal is $100,000.

  6.47% of $6,000 is $389 which is larger than =  6.47% of $5,000 which is $324 .

now,(calculating the cost of a loan is more this shows the effect as well).

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The higher the principal, the higher the total cost of the loan

Explanation:

From the chart shown we can see that the loan with a higher principal has a higher total cost than the loan with the smaller principal.

This happens because the interest rate attached affects larger figures more than smaller ones. 6.47% of $6,000 is $389 which is larger than 6.47% of $5,000 which is $324 (calculating the cost of a loan is more cumbersome than this but this shows the effect as well).

When compounded overtime, this difference will be even more and thus shows that larger principals cause larger total costs.