Question

a. Use the table to b. Construct t c. Assume that the borrower has the first three lines of your payment schedule under this assumption. wetaastake out a 30-year mortgage for $1130000t an annual rato of 5%. the first three lines of an amortization schodule for this mortgag to find the monthly payment for this mortgage. eer month to pay off the mortgage more quicky Find a. The monthly payments for this morigage are (Type an integer or a decimal.) b. Construct the first three lines of an amortization schedule for this mortgage. Round to the nearest cent as needed Paid on Principal $113.000 Payment terest paidPri Balance Month 1 nth 2 onth 3 has decided to pay an extra $200 per month to pay off the mortgage more quickly. Find the first three lines of the payment schedule under this assumption. Round to the nearest cent as needed) aymentMonthly numberPayment Interest paid Principal Balance Paid on $113,000 onth 2 onth 3 Monthly Payment on a $1,000 loan Number of Years for the Loan 20 30 10 $29.53 $22.58 $10.12 $6.06 $4.77 29.97 23.03 10.61 6.60 5.37 304223.491110 7.166.00 31.34 24.41 12.13 8.36 7.34 32.27 25.36 13.22 9.65 8.78 Annual Interest Rate3 5% 6% 8% 10% 12% | 3321 | 2633| 1435 | 11.01 | 1029

Answer 1

1. According to given information the mortgage amount is $113000

Rate of interest r = 5%

Rate of interest r = 5 / 100 = 0.05

And for monthly compounding r = 0.05/ 12 = 0.004167

Now number of payments is 30 years so 30 x 12 = 360

Now from the given table we have an monthly payment for principal amount $1000 is $5.37

So for $113000 the monthly payment = (113000 / 1000) x 5.37

Monthly payment = 113 x 5.37 = $606.81

2. Now we need to calculate amortization schedule for 3 payments

So for 1^st month we need calculate the interest on principal

So interest part is 113000 x 0.004167 = $470.871

And principal paying amount = 606.81 – 470.871 = $135.939

So balance principal amount = 113000 – 135.939 = $112864.061

Now for 2^nd payment we need to calculate interest on balance principal amount

So 112864.061 x 0.004167 = $470.304

And principal paying amount = 606.81– 470.304= $136.506

So balance principal amount = 112864.061– 136.506= $112727.555

Now for 3^rd payment we need to calculate interest on balance principal amount

So 112727.555x 0.004167 = $469.735

And principal paying amount = 606.81 – 469.735 = $137.075

So balance principal amount = 112727.555 – 137.075 = $112590.48

	PAYMENT NUMBER	MONTHLY PAYMENT	INTEREST PAID	PAID ON PRINCIPAL	BALANCE
					$113000
MONTH 1	1	$606.81	$470.871	$135.939	$112864.061
MONTH 2	2	$606.81	$470.304	$136.506	$112727.555
MONTH 3	3	$606.81	$469.735	$137.075	$112590.48

C) assume that we have to decided to pay extra $200 then the new amortization table as follows

Now the new monthly payment well be 606.81 + 200 = $806.81

Now we need to calculate amortization schedule for 3 payments

So for 1^st month we need calculate the interest on principal

So interest part is 113000 x 0.004167 = $470.871

And principal paying amount = 806.81 – 470.871 = $335.939

So balance principal amount = 113000 – 335.939 = $112664.061

Now for 2^nd payment we need to calculate interest on balance principal amount

So 112664.061 x 0.004167 = $469.471

And principal paying amount = 806.81– 469.471= $337.339

So balance principal amount = 112664.061– 337.339= $112326.722

Now for 3^rd payment we need to calculate interest on balance principal amount

So 112326.722 x 0.004167 = $468.065

And principal paying amount = 806.81 – 468.065 = $338.745

So balance principal amount = 112326.722 – 338.745 = $111987.977

	PAYMENT NUMBER	MONTHLY PAYMENT	INTEREST PAID	PAID ON PRINCIPAL	BALANCE
					$113000
MONTH 1	1	$806.81	$470.871	$335.939	$112664.061
MONTH 2	2	$806.81	$469.471	$337.339	$112326.722
MONTH 3	3	$806.81	$468.065	$338.745	$111987.977