Izzy bought a house for $200,000 which she financed for 30 years at 3%, annual payments....
Izzy bought a house for $200,000 which she financed for 30 years at 3%, annual payments. How much Principal did she pay on the loan the first year?
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$4,203.85 |
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$6,000.00 |
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$8,319.61 |
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$10,203.85 |
Homework Answers
Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate
200,000=Annuity[1-(1.03)^-30]/0.03
200,000=Annuity*19.6004413
Annuity=200,000/19.6004413
=$10203.85(Approx)
Interest payment for the first year=$200,000*3%=$6000
Hence principal payment for the first year=Total payment-Interest payment
=(10203.85-6000)
=$4203.85(Approx).
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