Business, 19.03.2020 06:59 ktene993

A fully amortizing mortgage loan is made for $80,000 at 6 percent interest for 25 years. Payments are to be made monthly. Calculate: a. Monthly payments. b. Interest and principal payments during month 1. c. Total principal and total interest paid over 25 years. d. The outstanding loan balance if the loan is repaid at the end of year 10. e. Total monthly interest and principal payments through year 10. f. What would the breakdown of interest and principal be during month 50

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Answer from: jude40

Explanation:

We would use an online amortization calculator to solve this question.

Loan Amount = 80,000

Term = 25 years

Interest Rate = 6 %

We would plug in these values into the mortgage calculator

https://www.amortization-calc.com/mortgage-calculator/

A - Monthly payments = $515.44

B - Interest paid in month1 = $400

Principle paid in month1 = $115

C - Total principle paid over 25 years = $80,000

Total interest paid over the 25 years = $74,632

D - The outstanding loan balance at the end of year10 $61,082

E - Total principal payments through year10 = $18918

Total interest payments through year10 = $42,935

F - Interest = $368

Principle = $147

Answer from: hardwick744

a. Monthly payments.

Number of payments= 25 × 12 = 300

Monthly Interest rateI=6%/12=0.5%

PV = $80,000

FV = 0

Using PMT formula in excel to calculate:

PMT = 515.44

Monthly payment is $515.44.

b. Interest and principal payments during month 1.

Interest payment during month 1 is $80,000 × 0.5%= 400

Principal payment during month 1 is $ 515.44 - $ 400 = $115.44

c. Total principal and total interest paid over 25 years.

Total principal payment is $ 80,000

Total interest payment is total payments – total principal payment =

(515.44 × 300) - $ 80,000 = $ 74,632 .

d. The outstanding loan balance if the loan is repaid at the end of year 10.

Number of payments = 10 × 12 = 120

I= 0.5%

PV = - $80,000

PMT = $515.44

Using PMT formula in excel to calculate the FV.

FV = 61,081.77

e. Total monthly interest and principal payments through year 10.

Total payment through year 10 is $515.44 × 120 = $61,852.8

Total principal payment is 80,000 – 61,081.77 = $18,918.23

Total interest payment is $61,852.8 - $18,918.23 = 42,934.57

f. What would the breakdown of interest and principal be during month 50

Loan balance at the end of month 49

Number of payments = 49

I=0.5%

PV = - $80,000

PMT = $515.44

Using PMT formula in excel to calculate the FV.

FV = 73,608.28

Interest payment is $73,608.28 × 0.5% = $368.04

Principal payment is 515.44 – 368.04 = $ 147.40

Answer from: Quest

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Answer from: Quest

b is the correct answer

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