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Assume you are looking to buy a house $200,000 with a 20-year mortgage at 12%, estimate...

Assume you are looking to buy a house $200,000 with a 20-year mortgage at 12%, estimate the monthly mortgage payment. How much money from the monthly payment goes towards equity in the first month? Second month?

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Answer #1

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Principal in First Payment $202.17
Principal in Second Payment

$204.19
P = Regular Payments
PV = Loan Amount
r = rate of interest
n = no of periods
P = r (PV)
1 - (1 + r )^-n
P = (12%/12)*200000
1 - (1 / (1 + 12%/12)^240))
P = 2000
0.908194163
P = 2202.17
Beginning Balance Interest Principal Ending Balance
1 $200,000.00 $2,000.00 $202.17 $199,797.83
2 $199,797.83 $1,997.98 $204.19 $199,593.63
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