Question

What is the principal portion of the 222 payments of a fully amortizing $250,000, 30-year fixed...

What is the principal portion of the 222 payments of a fully amortizing $250,000, 30-year fixed rate loan with an interest rate of 4.825%?

Multiple Choice:

$562.38

$565.29

$753.07

$1,315.44

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Homework Answers

Answer #1

Loan = 250000, Period of loan = 30 years = 30 x 12 months = 360 months,

Rate of interest = 4.825% per year

Monthly rate = Per year rate / No of months in a year = 4.825% / 12

We need to find the principal portion of 222nd payment of loan

We can find principal portion for any payment of loan using ppmt function in excel

Formula to be used in excel: =PPMT(rate,per,nper,-pv)

Using ppmt function in excel, we get principal portion of 222nd payment of loan = 753.07

Hence principal portion of 222nd payment = 753.07

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