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John and Peggy recently bought a house. They financed the house with a $125,000, 30-year mortgage...

  1. John and Peggy recently bought a house. They financed the house with a $125,000, 30-year mortgage with a nominal interest rate of 7 percent. Mortgage payments are made at the end of each month. What total dollar amount of their mortgage payments during the first three years will go towards repayment of principal?
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Answer #1

- Loan Amount = $125,000

Monthly Interest rate = 7%/12 = 0.58333%

No of monthly payments = 30 years*12 = 360

Calculating the total dollar amount of mortgage payment during the first 3 years(or first 36 payments) using the Excel "CUMPRINC" function:-

So, the total dollar amount of mortgage payment is $4091.30

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