Question

Suppose that a 15-year mortgage loan for 200 00o USD is obtained. The mortgage is a...

Suppose that a 15-year mortgage loan for 200 00o USD is obtained. The mortgage is a level-payment, fixed rate, fully amortized mortgage. The mortgage rate is 7%.

a.Compute an amortization schedule for the first six months.

b. What will the mortgage balance be at the end of 15th year?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

First we need to find the monthly payment using PMT function in EXCEL

=PMT(rate,nper,pv,fv,type)

rate=7%/12=0.5833%

nper=15 years*12=180

pv=200000

fv=0

=PMT(0.5833%,180,-200000,0,0)=$1797.66

a. Please find the amortization schedule with formulas

Periods Opening Balance Monthly fixed payment Interest amount=(Opening Balance*0.5833%) Principal amount=Monthly payment-Interest Ending Balance=Opening Balance-Principal
1 200000.00 1797.66 1166.67 630.99 199369.01
2 199369.01 1797.66 1162.99 634.67 198734.34
3 198734.34 1797.66 1159.28 638.37 198095.97
4 198095.97 1797.66 1155.56 642.10 197453.87
5 197453.87 1797.66 1151.81 645.84 196808.03
6 196808.03 1797.66 1148.05 649.61 196158.42

b. The end of the balance will become zero beacuse the mortgage period is 15 years

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You plan to purchase a $130,000 house using a 15-year mortgage obtained from your local credit...
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....
David and Debi Davidson have just signed a 15-year, 3% fixed rate mortgage for $380,000 to...
David and Debi Davidson have just signed a 15-year, 3% fixed rate mortgage for $380,000 to buy their house. Find out this couple's monthly mortgage payment by preparing a loan amortization schedule for the Davidson’s for the first 2 months; find out how much of their payments applied to interest; and after 2 payments, how much of their principal will be reduced. (construct a loan amortization schedule and show your calculations).
You borrow ​$300,000 to buy a house over a 15​-year term. The loan is structured as...
You borrow ​$300,000 to buy a house over a 15​-year term. The loan is structured as an amortized loan with annual payments and an interest rate of 10​%. Find the information for the amortization schedule for years 1 and 2. Payment​ ($) Interest in Payment​ ($) Principal Repaid​ ($) Principal Owing at End of Year​ ($)
You plan to purchase a $410,000 house using a 15-year mortgage obtained from your bank. The...
You plan to purchase a $410,000 house using a 15-year mortgage obtained from your bank. The mortgage rate offered to you is 4.75 percent. You will make a down payment of 20 percent of the purchase price. a. Calculate your monthly payments on this mortgage. b. Construct the amortization schedule for the mortgage. How much total interest is paid on this mortgage?
Robert and Rebecca Richardson have just signed a 30-year, 4% fixed rate mortgage for $320,000 to...
Robert and Rebecca Richardson have just signed a 30-year, 4% fixed rate mortgage for $320,000 to buy their house. Find out this couple's monthly mortgage payment by preparing a loan amortization schedule for the Richardson’s for the first 2 months; find out how much of their payments applied to interest; and after 2 payments, how much of their principal will be reduced. (Please construct a loan amortization schedule and show your calculations).
Your company is planning to borrow $1 million on a 5-year, 15%, annual payment, fully amortized...
Your company is planning to borrow $1 million on a 5-year, 15%, annual payment, fully amortized term loan. Develop an amortization schedule by inserting an additional column that will represent the fraction of the payment made at the end of each year that will represent repayment of principal.
David and Debi Davidson have just signed a 30-year, 4% fixed-rate mortgage for $360,000 to buy...
David and Debi Davidson have just signed a 30-year, 4% fixed-rate mortgage for $360,000 to buy their house.  Find out this couple's monthly mortgage payment by preparing a loan amortization schedule for the Davidson’s for the first 2 months; find out how much of their payments applied to interest; and after 2 payments, how much of their principal will be reduced. (Please construct a loan amortization schedule and show your calculations).
A. Julio has taken out a 25-year mortgage for $82,000.       The interest rate is 8.5%...
A. Julio has taken out a 25-year mortgage for $82,000.       The interest rate is 8.5% and the down payment is 20%.       Calculate the monthly payment. Purchase Price $82,000.00 Interest Rate 8.5% Length of Loan in Years 25 Down Payment Percent 20% Down Payment Amount Financed Units Factor 8.0528 Monthly Payment B. Complete the amortization schedule for the first three months of Julio’s mortgage. Month Monthly Payment Interest Portion Principal Portion Loan Balance ––––– ––––– ––––– ––––– 1 2...
Consider a $75,000 mortgage loan with an annual interest rate of 4 percent. The loan term...
Consider a $75,000 mortgage loan with an annual interest rate of 4 percent. The loan term is seven years, but monthly payments will be based on a 30-year amortization schedule. What is the monthly payment? What will be the required balloon payment at the end of the loan term?
Your brother's business obtained a 30-year amortized mortgage loan for $125,000 at a nominal annual rate...
Your brother's business obtained a 30-year amortized mortgage loan for $125,000 at a nominal annual rate of 7.0%, with 360 end-of-month payments. The firm can deduct the interest paid for tax purposes. What will the interest tax deduction be for Year 1?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT