Mortgage loan. You borrow $100,000 for twenty years at 5.25% interest on Hallowe
ID: 2819730 • Letter: M
Question
Mortgage loan.
You borrow $100,000 for twenty years at 5.25% interest on Halloween, 2017.
What is your monthly payment?
What is the principal and interest dollar amount breakouts for Nov 2017, Feb 2018, June 2018, and Dec 2018?
Assuming no late payments, how much total interest did you pay in 2018, and how much in total principal?
What is the ending Balance on Dec. 31, 2018?
***Regardless of whether you used 360 or 365 days the first time, now use the other and tell me what the difference in principle pay down is between the two methods at year ends 2018?***
Explanation / Answer
Monthly payment
Using PMt function in MS excel
pmt(rate,nper,pv,fv,type) rate = 5.25%/12 = .4375% nper = 20*12 = 240 pv = 100000 fv = 0 type = 0
PMT(0.4375%,240,-100000,0,0)
$673.84
date
opening balance
monthly payment
interest = opening balance*.4375%
principal paid= monthly payment-interest
month end balance = opening balance-principap oaid
Nov 1 2017
100000
nov 30 2017
100000
$673.84
437.5
$236.34
$99,763.66
dec 31 2017
$99,763.66
$673.84
$436.47
$237.38
$99,526.28
Jan 30 2018
$99,526.28
$673.84
$435.43
$238.42
$99,287.86
Feb 28 2018
$99,287.86
$673.84
$434.38
$239.46
$99,048.40
Mar 30 2018
$99,048.40
$673.84
$433.34
$240.51
$98,807.89
April 30 2018
$98,807.89
$673.84
$432.28
$241.56
$98,566.33
May 30 2018
$98,566.33
$673.84
$431.23
$242.62
$98,323.72
June 30 2018
$98,323.72
$673.84
$430.17
$243.68
$98,080.04
July 30 2018
$98,080.04
$673.84
$429.10
$244.74
$97,835.30
August 30 2018
$97,835.30
$673.84
$428.03
$245.81
$97,589.48
September 30 2018
$97,589.48
$673.84
$426.95
$246.89
$97,342.59
October 30 2018
$97,342.59
$673.84
$425.87
$247.97
$97,094.62
November 30 2018
$97,094.62
$673.84
$424.79
$249.06
$96,845.57
December 31 2018
$96,845.57
$673.84
$423.70
$250.14
$96,595.42
total interest paid in 2018
$5,155.27
ending balance in dec 2018
$96,595.42
Monthly payment
Using PMt function in MS excel
pmt(rate,nper,pv,fv,type) rate = 5.25%/12 = .4375% nper = 20*12 = 240 pv = 100000 fv = 0 type = 0
PMT(0.4375%,240,-100000,0,0)
$673.84
date
opening balance
monthly payment
interest = opening balance*.4375%
principal paid= monthly payment-interest
month end balance = opening balance-principap oaid
Nov 1 2017
100000
nov 30 2017
100000
$673.84
437.5
$236.34
$99,763.66
dec 31 2017
$99,763.66
$673.84
$436.47
$237.38
$99,526.28
Jan 30 2018
$99,526.28
$673.84
$435.43
$238.42
$99,287.86
Feb 28 2018
$99,287.86
$673.84
$434.38
$239.46
$99,048.40
Mar 30 2018
$99,048.40
$673.84
$433.34
$240.51
$98,807.89
April 30 2018
$98,807.89
$673.84
$432.28
$241.56
$98,566.33
May 30 2018
$98,566.33
$673.84
$431.23
$242.62
$98,323.72
June 30 2018
$98,323.72
$673.84
$430.17
$243.68
$98,080.04
July 30 2018
$98,080.04
$673.84
$429.10
$244.74
$97,835.30
August 30 2018
$97,835.30
$673.84
$428.03
$245.81
$97,589.48
September 30 2018
$97,589.48
$673.84
$426.95
$246.89
$97,342.59
October 30 2018
$97,342.59
$673.84
$425.87
$247.97
$97,094.62
November 30 2018
$97,094.62
$673.84
$424.79
$249.06
$96,845.57
December 31 2018
$96,845.57
$673.84
$423.70
$250.14
$96,595.42
total interest paid in 2018
$5,155.27
ending balance in dec 2018
$96,595.42
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