Question

Section 4 - Mortgage Calculation -- Instructions - You Have Decided to use a 20 year Amortization for your Mortgage. Use this information to find the MONTHLY mortgage PAYMENT using the mortgage amount from previous section and a rate of 3.21%. You must also determine the amount of INTEREST, PRINCIPAL and BALANCE owing for the mortgage after 3 Years and 7 Months. Input all the TVM variables and answers into the fields below. Amortization Mortgage Amount From Previous Question $378102 20 Years P1 Months P2 Months Present Value of Loan (PV 378102 Monthly Payment (PMT) BALANCE OWING (BAL) Number of Periods (N) 240 Mortgage Rate As % I/Y) Value At End of Loan (FV) PRINCIPAL PAID (PRN) 3.21 INTEREST PAID (INT) Section Value: 7 Submit Answers

Answer 1

Mortgage = $ 378102, Interest Rate = 3.21 %, Tenure = 240 months, Applicable Monthly Interest Rate = 3.21 / 12 = 0.2675 %

Let the monthly repayments be $ p

Therefore, 378102 = p x (1/0.002675) x [1-{1/(1.002675)^(240)}]

378102 = p x 176.938

p = 378102 / 176.938 = $ 2136.91

Time Elapsed: 3years 7 months or (3 x 12) = 36 + 7 = 43 months

Remaining Time = 240 - 43 = 197 months

Outstanding Balance after 43 months = 2136.91 x (1/0.002675) x [1-{1/(1.002675)^(197)}] = $ 326885.085

Principal Paid = 378102 - 326885.085 = $ 51216.915

Interest Paid = 2136.91 x 43 - 51216.915 = $ 40670.424