On August 1, you borrow $180,000 to buy a house. The mortgage rate is 7.0 percent. The loan is to be repaid in equal monthly payments over 15 years. The first payment is due on September 1. How much of the tenth payment applies to the principle balance? (Assume that each month is equal to 1/12 of a year.)
Group of answer choices
$543.22
$566.24
$589.28
$598.41
$615.32
rate positively ..
We have to compute first monthly payment and than amortizationn table | ||||||||
Put in financial calculator - | ||||||||
FV | 0 | |||||||
PV | -180000 | |||||||
I | 7%/12 | 0.5833% | ||||||
N | 15*12 | 180 | ||||||
Compute PMT | $1,617.89 | |||||||
Amortization table | ||||||||
Period | Beginning balance | Interest | Payment | Principal | ending balance | |||
0 | 180000 | |||||||
1 | 180000 | 1050 | $1,617.89 | $567.89 | $179,432.11 | |||
2 | 179432.1 | 1046.687 | $1,617.89 | $571.20 | $178,860.91 | |||
3 | 178860.9 | 1043.355 | $1,617.89 | $574.54 | $178,286.37 | |||
4 | 178286.4 | 1040.004 | $1,617.89 | $577.89 | $177,708.48 | |||
5 | 177708.5 | 1036.633 | $1,617.89 | $581.26 | $177,127.22 | |||
6 | 177127.2 | 1033.242 | $1,617.89 | $584.65 | $176,542.58 | |||
7 | 176542.6 | 1029.832 | $1,617.89 | $588.06 | $175,954.52 | |||
8 | 175954.5 | 1026.401 | $1,617.89 | $591.49 | $175,363.03 | |||
9 | 175363 | 1022.951 | $1,617.89 | $594.94 | $174,768.09 | |||
10 | 174768.1 | 1019.481 | $1,617.89 | $598.41 | $174,169.68 | |||
therefore, answer = | $598.41 |
On August 1, you borrow $180,000 to buy a house. The mortgage rate is 7.0 percent....
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