Question

A 15-year, $160,000 mortgage has a rate of 5.7 percent.

a. What are the interest and principal portions in the first payment? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b. What are the interest and principal portions in the second payment? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Answer 1

	Monthly rate(M)=	yearly rate/12=	0.48%	Monthly payment=	1324.38
Month	Beginning balance (A)	Monthly payment	Interest = M*A	Principal paid	Ending balance
1	160000.00	1324.38	760.00	564.38	159435.62
2	159435.62	1324.38	757.32	567.06	158868.57

Where

Interest paid = Beginning balance * Monthly interest rate

Principal = Monthly payment – interest paid

Ending balance = beginning balance – principal paid

Beginning balance = previous Month ending balance