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 |

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