Consider a 30-year adjustable rate mortgage (ARM), which requires the borrower to make monthly payments at...
Consider a 30-year adjustable rate mortgage (ARM), which requires the borrower to make monthly payments at the end of each month. The mortgage amount is $432,000 and the APR on the mortgage is 3.65% for the first 10 years and then 3.87% for the next 20 years. Prepare a loan amortization schedule for this mortgage. Assume that the mortgage closing date is October 1, 2018. Among other things, the following columns should be included. (50) (i) Date (ii) Beginning Balance (iii) Payment (iv) Principal (v) Interest (vi) Cumulative Principal (vii) Cumulative Interest (viii) Ending Balance
Please show excel functions used.
Homework Answers
Beginning Balance = $432,000
ARM% (10 years) = 3.65%
ARM% (20 years) = 3.87%
Period = 30 years
Payments = $24,188
| Date | Beginning Balance | Payment | Interest | Principal | Cumulative Principal | Cumulative Interest | Ending Balance |
| 01-10-1989 | $4,32,000 | $24,188 | $15,768 | $8,420 | $8,420 | $15,768 | $4,23,580 |
| 01-10-1990 | $4,23,580 | $24,188 | $15,461 | $8,727 | $17,147 | $31,229 | $4,14,853 |
| 01-10-1991 | $4,14,853 | $24,188 | $15,142 | $9,046 | $26,193 | $46,371 | $4,05,807 |
| 01-10-1992 | $4,05,807 | $24,188 | $14,812 | $9,376 | $35,568 | $61,183 | $3,96,432 |
| 01-10-1993 | $3,96,432 | $24,188 | $14,470 | $9,718 | $45,286 | $75,653 | $3,86,714 |
| 01-10-1994 | $3,86,714 | $24,188 | $14,115 | $10,073 | $55,359 | $89,768 | $3,76,641 |
| 01-10-1995 | $3,76,641 | $24,188 | $13,747 | $10,440 | $65,800 | $1,03,515 | $3,66,200 |
| 01-10-1996 | $3,66,200 | $24,188 | $13,366 | $10,821 | $76,621 | $1,16,881 | $3,55,379 |
| 01-10-1997 | $3,55,379 | $24,188 | $12,971 | $11,216 | $87,837 | $1,29,853 | $3,44,163 |
| 01-10-1998 | $3,44,163 | $24,188 | $12,562 | $11,626 | $99,463 | $1,42,415 | $3,32,537 |
| 01-10-1999 | $3,32,537 | $24,188 | $12,869 | $11,319 | $1,10,782 | $1,55,284 | $3,21,218 |
| 01-10-2000 | $3,21,218 | $24,188 | $12,431 | $11,757 | $1,22,539 | $1,67,715 | $3,09,461 |
| 01-10-2001 | $3,09,461 | $24,188 | $11,976 | $12,212 | $1,34,750 | $1,79,691 | $2,97,250 |
| 01-10-2002 | $2,97,250 | $24,188 | $11,504 | $12,684 | $1,47,434 | $1,91,195 | $2,84,566 |
| 01-10-2003 | $2,84,566 | $24,188 | $11,013 | $13,175 | $1,60,610 | $2,02,207 | $2,71,390 |
| 01-10-2004 | $2,71,390 | $24,188 | $10,503 | $13,685 | $1,74,295 | $2,12,710 | $2,57,705 |
| 01-10-2005 | $2,57,705 | $24,188 | $9,973 | $14,215 | $1,88,509 | $2,22,683 | $2,43,491 |
| 01-10-2006 | $2,43,491 | $24,188 | $9,423 | $14,765 | $2,03,274 | $2,32,106 | $2,28,726 |
| 01-10-2007 | $2,28,726 | $24,188 | $8,852 | $15,336 | $2,18,610 | $2,40,958 | $2,13,390 |
| 01-10-2008 | $2,13,390 | $24,188 | $8,258 | $15,930 | $2,34,540 | $2,49,216 | $1,97,460 |
| 01-10-2009 | $1,97,460 | $24,188 | $7,642 | $16,546 | $2,51,086 | $2,56,858 | $1,80,914 |
| 01-10-2010 | $1,80,914 | $24,188 | $7,001 | $17,186 | $2,68,272 | $2,63,859 | $1,63,728 |
| 01-10-2011 | $1,63,728 | $24,188 | $6,336 | $17,852 | $2,86,124 | $2,70,196 | $1,45,876 |
| 01-10-2012 | $1,45,876 | $24,188 | $5,645 | $18,542 | $3,04,666 | $2,75,841 | $1,27,334 |
| 01-10-2013 | $1,27,334 | $24,188 | $4,928 | $19,260 | $3,23,926 | $2,80,769 | $1,08,074 |
| 01-10-2014 | $1,08,074 | $24,188 | $4,182 | $20,005 | $3,43,931 | $2,84,951 | $88,069 |
| 01-10-2015 | $88,069 | $24,188 | $3,408 | $20,780 | $3,64,711 | $2,88,360 | $67,289 |
| 01-10-2016 | $67,289 | $24,188 | $2,604 | $21,584 | $3,86,294 | $2,90,964 | $45,706 |
| 01-10-2017 | $45,706 | $24,188 | $1,769 | $22,419 | $4,08,713 | $2,92,733 | $23,287 |
| 01-10-2018 | $23,287 | $24,188 | $901 | $23,287 | $4,32,000 | $2,93,634 | $0 |
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