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The value of the mortgage is  $297,120  and the monthly payment is

The value of the mortgage is  $297,120  and the monthly payment is

Essentials Of Investments
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

A house sells for 

$309,500

 and a 

4%

 down payment is made. A mortgage is secured at 

4%

 for 

20

 years. Compute an amortization schedule for the first 

3

 months. Round your answers to two decimal places, if necessary.

The value of the mortgage is 

$297,120

 and the monthly payment is 

$1800.55

.

Part: 0 / 3
0 of 3 Parts Complete
 
Part 1 of 3
 
 
 

 

  
Payment number
  
  
Interest
  
  
Payment on Principal
  
  
Balance of Loan
  
1
$
$
$
 
Procedure for Computing an Amortization Schedule
Step 
1   
 Find the interest for the first month. Use 
=IPrt
, where 
=t112
. Enter this value in a column labeled Interest.
Step 
2   
 Subtract the interest from the monthly payment to get the amount paid on the principal. Enter this amount in a column labeled Payment on Principal.
Step 
3   
 Subtract the amount of the payment on principal found in step 
2
 from the principal to get the balance of the loan. Enter this in a column labeled Balance of Loan.
Step 
4   
 Repeat the steps using the amount of the balance found in step 
3
 for the new principal.
 

 

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