Question

1. You have just purchased your dream house on Hawai’i for $500,000. You have been charged an interest rate of 9% APR, compounded monthly, and have entered into a 30-year mortgage with the bank. What are your monthly payments? 2. What are the second month's principal payment and ending balance?

Answer 1

Ans Monthly Payment : $4023.11

second month's principal payment = $273.11

second month's ending balance = $ 491953.77

	P =	Regular Payments
	PV =	Loan Amount
	r =	rate of interest
	n =	no of periods
	P =	r (PV)
		1 - (1 + r )^-n
	P =	(9%/12)*500000
		1 - (1 / (1 + 9%/12)^360))
	P =	3750
		0.932113993
	P =	4023.11
	Beginning Balance	Interest	Principal	Ending Balance
1	500000.00	3750.00	273.11	495976.89
2	495976.89	3719.83	303.29	491953.77