The cost of a home is financed with a $110.000 20-year fixed-rate mortgage at 4.
ID: 2763233 • Letter: T
Question
The cost of a home is financed with a $110.000 20-year fixed-rate mortgage at 4.5%. Find the monthly payments and the total interest for the loan. Prepare a loan amortization schedule for the first three months of the mortgage. The monthly payment is $. (Do not round until the final answer. Then round to the nearest cent as needed.) The total interest for the loan is $. (Use the answer from part a to find this answer. Round to the nearest cent as needed.) Fill out the loan amortization schedule for the first three months of the mortgage below. Use the answer from part a to find these answers. Round to the nearest cent as needed.Explanation / Answer
E = P×r×(1 + r)n/((1 + r)n - 1)
EMI= Equal Monthly Installment=?
P= Principal= $110,000
r=rate of interest = 4.5% or 0.375 monthly ie 0.00375
n= 20 years x 12 = 240 periods
=110,000 x 0.00375 x( 1+0.00375)240 /( 1+0.00375)240 -1
=412.5 x 2.455466361/2.455466361-1
=412.5 x 2.455466361/1.455466361
=412.5 x 1.687065003
=$695.91
Month
Beg Balance
Installment
Interest
Principal
Ending Loan Balance
0
110,000.00
1
110,000
695.91
412.50
283.41
109,716.59
2
109,716.59
695.91
411.44
284.48
109,432.11
3
109,432.11
695.91
410.37
285.54
109,146.56
Payment Number
Interest
Principal
Loan Balance
0
-
-
110,000.00
1
412.50
283.41
109,716.59
2
411.44
284.48
109,432.11
3
410.37
285.54
109,146.56
Month
Beg Balance
Installment
Interest
Principal
Ending Loan Balance
0
110,000.00
1
110,000
695.91
412.50
283.41
109,716.59
2
109,716.59
695.91
411.44
284.48
109,432.11
3
109,432.11
695.91
410.37
285.54
109,146.56
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