Question

I need help with this problem.

Caleb purchased his first home for $420,000. He made a 10% down payment and financed the remaining purchase price. The terms of the loan were as follows 30 year loan Payments made monthly Interest charged at 9% convertible monthly In which month is the first payment for which the principal component is greater than half of the payment? А 267 269 в C 270 266 E 268

Answer 1

B. 269

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

B $420,000.00 10% $378,000.00 30 Purchase price Down payment Loan amount Term in years APR Monthly interest rate No. of monthly payment Monthly payments 9% 0.75% 360 $3,041.47 11 12 13 Payment Period 266 267 268 269 270 Principal Portion $1,495.56 $1,506.78 $1,518.08 $1,529.46 $1,540.93 % 49.17% 49.54% 49.91% 50.29% 50.66% 15

Cell reference -

B Purchase price Down payment Loan amount Term in years APR Monthly interest rate No. of monthly payment Monthly payments 420000 0.1 =C2*(1-C3) 30 10.09 =C6/12 =C5*12 =PMT(C7,C8,-C4,,0) Payment Period % 266 267 268 269 270 Principal Portion =PPMT($C$7,B12,$C$8,-$C$4,,0) =PPMT($C$7,813,$C$8,-$C$4,0) =PPMT($C$7,B14,$C$8,-$C$4,0) =PPMT($C$7,B15,$C$8,-$C$4,,0) =PPMT($C$7,B16,$C$8,-$C$4,,0) =C12/$C$9 =C13/$C$9 =C14/$C$9 =C15/$C$9 =C16/$C$9

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