Question

You plan to purchase a $130,000 house using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is 5.25 percent. You will make a down payment of 20 percent of the purchase price.

a.

Calculate your monthly payments on this mortgage. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Monthly payment $   

b.

Construct the amortization schedule for the first six payments. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

Amortization Schedule for first 6 payments (months)

Month Beginning Loan Balance Payment Interest Principal Ending Loan

Balance

1 $ $ $ $ $   

2

3

4

5

6

Answer 1

a)	We can use excel formula to calculate this
	PMT(r%,t,-P)
	Where=r%=monthly interest=5.25%/12; t=months=15*12=180; p=mortgage=130000*(1-20%)=$104,000
	=pmt(5.25%/12,180,-104000)
	$836.03
b)	Month	Beginning loan balance	Payment	Interest	Principal	Ending loan
	1	$ 104,000.00	$ 836.03	$ 455.00	$ 381.03	$ 103,618.97
	2	$ 103,618.97	$ 836.03	$ 453.33	$ 382.70	$ 103,236.27
	3	$ 103,236.27	$ 836.03	$ 451.66	$ 384.37	$ 102,851.89
	4	$ 102,851.89	$ 836.03	$ 449.98	$ 386.06	$ 102,465.84
	5	$ 102,465.84	$ 836.03	$ 448.29	$ 387.74	$ 102,078.09
	6	$ 102,078.09	$ 836.03	$ 446.59	$ 389.44	$ 101,688.65