Question

You need to borrow $200,000. E-Click loans will make a 30 year, fully amortizing mortgage loan with monthly payments, with no points at an interest rate of 8%. (a) Construct a loan amortization schedule for the first 4 months of the loan. (b) What is the principal amount of your loan outstanding after 7 years (84 months) of making payments? Show that you can determine this by finding the FV of the loan after 7 years. Highlight your final answer

Answer 1

a:

Loan Amount	Interest Rate	Term in Years	Monthly Payment
$200,000.00	8.00%	30	$1,467.53
Month	StartingBalance	Interest	Principal	EndingBalance	TotalInterest
1	$200,000.00	$1,333.33	$134.20	$199,865.80	$1,333.33
2	$199,865.80	$1,332.44	$135.09	$199,730.71	$2,665.77
3	$199,730.71	$1,331.54	$135.99	$199,594.72	$3,997.31
4	$199,594.72	$1,330.63	$136.90	$199,457.83	$5,327.94

b: Amount outstanding =

$184,954.86

Using financial calculator
Input: PMT = 1467.53, N=84,I/Y=8/12, PV=-200000

Solve for FV as 184,954.86

Month	StartingBalance	Interest	Principal	EndingBalance	TotalInterest
80	$186,104.26	$1,240.70	$226.83	$185,877.42	$103,279.76
81	$185,877.42	$1,239.18	$228.35	$185,649.08	$104,518.94
82	$185,649.08	$1,237.66	$229.87	$185,419.21	$105,756.60
83	$185,419.21	$1,236.13	$231.40	$185,187.81	$106,992.73
84	$185,187.81	$1,234.59	$232.94	$184,954.86	$108,227.31
85	$184,954.86	$1,233.03	$234.50	$184,720.37	$109,460.34

File Home Insert DrawPage Layout Formulas Data Review View Help 0 10 Arial BIU - H A™ À A A . === . del = = SEE 3 = = . General $ -% Tell me what you want to do P2 D 2 Conditional Format as Cell Formatting Table Styles Styles nsert Delete - Format Share Com 47 O . Sort & Find & Filter Select Editing Paste t . 0 . 68 0 .00 Clipboard Font Alignment Cells A5 - X fx Loan Amount C A B D E F H Loan Amount. Interest Rate 200000 0.08 Term in Years 30 Monthly Payment =PMT(B6/12, (C6*12),-A6) Month - NO Starting Balance Interest Principal =A6 =B9*(B$6/12) =D$6-C9 =E9 =B10*(B$6/12) =D$6-C10 =E10 =B11*(B$6/12) =D$6-C11 =E11 =B12*(B$6/12) =D$6-C12 =E12 =B13*(B$6/12) =D$6-C13 =B14"(B$6/12) =D$6-C14 =B15*(B$6/12) =D$6-C15 =R16°/BS6/12) = $6.016 EndingBalance Totallnterest =B9-D9 =C9 =B10-D10 =F9+C10 =B11-D11 =F10+C11 =B12-D12 =F11+C12 =B13-D13 =F12+C13 =B14-D14 =F13+C14 =B15-D15 =F14+C15 =R16.116 =15+16 =E13 =E14 45