Question

You recently purchased a new home for $120,000 and have obtained a 7% loan for the...

You recently purchased a new home for $120,000 and have obtained a 7% loan for the full $120,000 with equal annual payments due at the end of each year for the next 30 years. Compute the amount of each annual payment and prepare the first year of the amortization schedule.

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Answer #1

the amount of each annual payment is $9,670.37.

Loan amount $120,000
Loan term (in years) 30
Interest rate 7.00%
Annual Loan payment $9,670.37

Calculation

first year of the amortization schedule

Loan amount $120,000
Loan term (in years) 30
Interest rate 7.00%
Annual Loan payment $9,670.37
Year Beginning balance Total payment Interest paid Principal paid Ending balance
1 $120,000 $9,670.37 $8,400.00 $1,270.37 $118,729.63

Calculation

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