Question

A loan of 620,000 is to be repaid in 30 years by month-end repayments starting in one month. The interest rate is 4.8% p.a. compounded monthly. Calculate the interest paid in Year 5. (between the end of month 48 and the end of month 60). Correct your answer to the nearest cent without any units. (Do not use "$" or "," in your answer. e.g. 12345.67) (Hint: you can use Excel to find the answer.).

Answer #1

Interest paid in Year 5 is given as 27550.56

Below is the loan amortization for year 5

Payment | Loan beginning balance | Payment | Interest payment | Principal payment | Loan ending balance |

49 | $5,79,188.28 | $3,252.93 | $2,316.75 | $936.17 | $5,78,252.11 |

50 | $5,78,252.11 | $3,252.93 | $2,313.01 | $939.92 | $5,77,312.19 |

51 | $5,77,312.19 | $3,252.93 | $2,309.25 | $943.68 | $5,76,368.52 |

52 | $5,76,368.52 | $3,252.93 | $2,305.47 | $947.45 | $5,75,421.07 |

53 | $5,75,421.07 | $3,252.93 | $2,301.68 | $951.24 | $5,74,469.82 |

54 | $5,74,469.82 | $3,252.93 | $2,297.88 | $955.05 | $5,73,514.78 |

55 | $5,73,514.78 | $3,252.93 | $2,294.06 | $958.87 | $5,72,555.91 |

56 | $5,72,555.91 | $3,252.93 | $2,290.22 | $962.70 | $5,71,593.21 |

57 | $5,71,593.21 | $3,252.93 | $2,286.37 | $966.55 | $5,70,626.66 |

58 | $5,70,626.66 | $3,252.93 | $2,282.51 | $970.42 | $5,69,656.24 |

59 | $5,69,656.24 | $3,252.93 | $2,278.62 | $974.30 | $5,68,681.94 |

60 | $5,68,681.94 | $3,252.93 | $2,274.73 | $978.20 | $5,67,703.74 |

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