Question

Hu Consulting needs to borrow $250,000 and is trying to determine what type of debt instrument to use. The company is considering two debt instruments: a long-term notes payable and a mortgage payable. The interest rate on both instruments is 6% and both instruments mature in ten years. The mortgage payable requires monthly payments of $2,775.51. The money will be borrowed on January 1, 2020.

B. Create an amortization schedule for the first two monthly payments of the mortgage payable. The first payment will be made on January 31, 2020, and the second payment will be made on February 29, 2020

Answer 1

MONTH	BALANCE(start)	PAYMENT	PRINCIPAL	INTEREST	BALANCE(end)
JAN 31 2020	$250000	$2775.51	$1526	$1250	$248474
FEB 29 2020	$248474	$2775.51	$1533	$1242	$246941

An amortization schedule is a table that lists each regular payment on a mortgage over time. A portion of each payment is applied toward the principal balance and interest, and the amortization schedule details how much will go toward each component of your mortgage payment

Initially, most of your payment goes toward the interest rather than the principal. The schedule will show as the term of your loan progresses, a larger share of your payment goes toward paying down the principal until the loan is paid in full at the end of your term