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
I would like to have a step by step detailed calculation of $ 33,184.47. Hopefully using the Sharp EL-738XT calculator.
Transcribed Image Text:Table 5.3 | Amortization Period for a $120,000 Mortgage at 4%
Monthly
Payment*
Principal Payment
Reductions**
$631.23
25 years (Longer
amortization period)
15 years (Shorter
amortization period)
$885.65
($254.42)
Total Interest
Paid***
$69,366.06
$33,184.67
Interest
Savings***
$36,181.39
* The amounts in this table were calculated using the RBC Mortgage Payment Calculator.
** This is the difference between $631.23 and $885.65= ($254.42) that is being applied directly to the outstanding
balance every month.
*** Interest savings are calculated over the entire amortization period, assuming that payments are made monthly
at a constant rate of interest, and recognizing semi-annual compounding.
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