Problem

Amortizing loans Suppose that you take out a 30-year mortgage loan of $200,000 at interest...

Amortizing loans Suppose that you take out a 30-year mortgage loan of $200,000 at interest rate of 10%.

a. What is your total monthly payment?


b. How much of the first month’s payment goes to reduce the size of the loan?


c. How much of the payment after two years goes to reduce the size of the loan?

You can check your answers by logging on to the personal finance page of www.smartmoney.com and using the mortgage calculator.

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