Question

First 12 payments of $175,000, 15-year loan with an interest rate of 4.5%:

Date	Interest	Principal	Balance
Jan, 2019	$656	$682	$174,318
Feb, 2019	$654	$685	$173,632
Mar, 2019	$651	$688	$172,945
Apr, 2019	$649	$690	$172,255
May, 2019	$646	$693	$171,562
Jun, 2019	$643	$695	$170,866
Jul, 2019	$641	$698	$170,168
Aug, 2019	$638	$701	$169,468
Sep, 2019	$636	$703	$168,765
Oct, 2019	$633	$706	$168,059
Nov, 2019	$630	$709	$167,350
Dec, 2019	$628	$711	$166,639
2019	$7,704	$8,361	$166,639

First 12 payments of $175,000, 30-year loan with an interest rate of 5%

Date	Interest	Principal	Balance
Jan, 2019	$729	$210	$174,790
Feb, 2019	$728	$211	$174,579
Mar, 2019	$727	$212	$174,367
Apr, 2019	$727	$213	$174,154
May, 2019	$726	$214	$173,940
Jun, 2019	$725	$215	$173,725
Jul, 2019	$724	$216	$173,510
Aug, 2019	$723	$216	$173,293
Sep, 2019	$722	$217	$173,076
Oct, 2019	$721	$218	$172,857
Nov, 2019	$720	$219	$172,638
Dec, 2019	$719	$220	$172,418
2019	$8,691	$2,582	$172,418

If you take the 15 year loan, instead of the 30year loan, assume the home value has not changed. How much additional equity have you built after 12 payments? Explain

Answer 1

Additional equity built after 12 payments=(175000-166639)-(175000-172418)=5779