Question

Jamie Enterprises purchased a warehouse by signing a long-term $400,000 mortgage with monthly payments of $3,100. The mortgage carries an interest rate of 9 percent. Prepare the first year of the mortgage payment schedule. Round answers to the nearest dollar.

Pmnt #		Payment		Principal		Interest		Balance
0								400,000.00
1
2
3
4
5
6
7
8
9
10
11
12

Answer 1

	(a)	(b)	(c)	(d)
Period	Payment	Principal Reduction	Interest Expense (effective interest rate = 9%/12)	Balance
		(a) - (c)	[Previous year balance X 0.75%]	[Previous year balance - (b)]
0				$                                       4,00,000
1	$    3,100	$                              100	$                                     3,000	$                                       3,99,900
2	$    3,100	$                              101	$                                     2,999	$                                       3,99,799
3	$    3,100	$                              102	$                                     2,998	$                                       3,99,698
4	$    3,100	$                              102	$                                     2,998	$                                       3,99,595
5	$    3,100	$                              103	$                                     2,997	$                                       3,99,492
6	$    3,100	$                              104	$                                     2,996	$                                       3,99,389
7	$    3,100	$                              105	$                                     2,995	$                                       3,99,284
8	$    3,100	$                              105	$                                     2,995	$                                       3,99,179
9	$    3,100	$                              106	$                                     2,994	$                                       3,99,073
10	$    3,100	$                              107	$                                     2,993	$                                       3,98,966
11	$    3,100	$                              108	$                                     2,992	$                                       3,98,858
12	$    3,100	$                              109	$                                     2,991	$                                       3,98,749