John has USD240,000 home loan for 20 years at a nominal rate of 4.5%convertible monthly. He makes fixed principal repayment of USD1000each month. Find,a. his loan balance after 12 yearsb. his 100th month paymentc. the sum of amount of interest paid in the 5th year (from 49th month to60th month).

In the above problem, John took a home loan for 20 years at a nominal interest rate of 4.5%, and…

Answered: a. his loan balance after 12 years b.…

a. his loan balance after 12 years b. his 100th month payment c. the sum of amount of interest paid in the 5th year (from 49th month to 60th month).

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

John has USD240,000 home loan for 20 years at a nominal rate of 4.5%
convertible monthly. He makes fixed principal repayment of USD1000
each month. Find,
a. his loan balance after 12 years
b. his 100th month payment
c. the sum of amount of interest paid in the 5th year (from 49th month to
60th month).

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Step 1: Introduction

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Step 2: Calculation of Amortized table

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Step 3: Computation of loan balance

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