A homebuyer borrows 400,000 to be repaid over a 20 year period with level monthly payments...

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A homebuyer borrows 400,000 to be repaid over a 20 year period with level monthly payments...

A homebuyer borrows 400,000 to be repaid over a 20 year period with level monthly payments beginning one month after the loan is made. The interest rate on the loan is a nominal annual rate of 12% convertible monthly. Find:

a. the monthly payment

b. the total principal paid on the loan over 20 years

c. the total interest paid on the loan over 20 years

d. the loan balance after 15 years

e. the total principal paid on the loan over the first 15 years

f. the total interest paid on the loan over the first 15 years

business finance

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Answer 1

Answer #1

As per rules I am answering the first 4 subparts of the question

We use excel function for the calculations.

a: Monthly payment = 4404.34

b: Total principal = Total loan borrowed = $400,000

c: Total Interest = $657042.69

d: Loan balance after 15 years= $197997.48

WORKINGS

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Answer 2

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