Question

Cassandra received a 15 year loan of $305,000 to purchase a house. The interest rate on the loan was 4.20% compounded semi-annually. a. What is the size of the monthly loan payment? $2,281.15 Round to the nearest cent b. What is the balance of the loan at the end of year 4? -4? O $241,250.91 Round to the nearest cent C. By how much will the amortization period shorten if Cassandra makes extra payment of $30,000 at the end of year 4? years ~ 1 months ®

Answer 1

1.
=PMT(((1+4.2%/2)^(2/12)-1)*12/12,12*15,-305000)=2281.1524248376

2.
=FV(((1+4.2%/2)^(2/12)-1)*12/12,12*4,PMT(((1+4.2%/2)^(2/12)-1)*12/12,12*15,-305000),-305000)=241250.911617695

3.
=12*15-(NPER(((1+4.2%/2)^(2/12)-1)*12/12,PMT(((1+4.2%/2)^(2/12)-1)*12/12,12*15,-305000),-FV(((1+4.2%/2)^(2/12)-1)*12/12,12*4,PMT(((1+4.2%/2)^(2/12)-1)*12/12,12*15,-305000),-305000)+30000)+12*4)=20.0948035420301

1 year 8.09 months