Question

You take out a 30-year loan in the amount of $450,000 at a 6 percent rate annually. The loan is to be paid off by equal monthly installments over 30 years. How much is the total interest payment for the first five months? Draw an amortization table to support your answer showing the beginning balance, total payment, principal repayment, interest payment and ending balance. (Note: You need to show only five months on the table. You may use excel and copy/paste your answer in the answer space).

Answer 1

Monthly payment = Loan = [(1-(1/(1+r^n}}}/r] $2,697.98 450,000 = [((1-(1/(1.0054360)}}/0.005] Payment Number Balance Beginning Loan $250,000.00 Payment $2,697.98 $248,552.02 $248,552.02 $2,697.98 $2,697.98 $2,697.98 $247,096.81 $245,634.31 $244,164.51 Interest paid $1,250.00 $1,242.76 $1,235.48 $1,228.17 $1,220.82 $6,177.24 principal paid $1,447.98 $ 1,455.22 $1,462.49 $1,469.81 $1,477.15 $247,096.81 $245,634.31 $244,164.51 $242,687.35 $2,697.98 Total interest in first five months =