Question

After taking financial markets class last year, Tom wanted to see if he can afford a $150,000 house, so he asked his local bank for a 30-year mortgage at 5.4% APR. In an amortization schedule, how much is the principal payment in his first monthly mortgage payment?

Answer 1

Ans $ 167.30

		P =	Regular Payments
		PV =	Loan Amount
		r =	rate of interest
		n =	no of periods
		P =	r (PV)
			1 - (1 + r )^-n
		P =	(5.4%/12)*150000
			1 - (1 / (1 + 5.4%/12)^360))
		P =	675
			0.801380809
		P =	842.30
	Beginning Balance	Interest	Principal	Ending Balance
1	150000	675	167.30	149832.70
		Principal in First Payment	167.30
		Interest in First Payment	675.00