Suppose that a 15-year mortgage loan for $200,000 is obtained. The mortgage is a level-payment, fixed-rate,...

Suppose that a 15-year mortgage loan for $200,000 is obtained. The mortgage is a level-payment, fixed-rate, fully amortized mortgage and the mortgage rate is 7.0% (APR, monthly).

a. Find the monthly mortgage payment.

b. Compute an amortization schedule for the first six months.

c. What will the mortgage balance be at the end of the 15th year?

d. If an investor purchased this mortgage, what will the timing of the cash flow be assuming that the borrower does not default?

Expert Solution


	Loan Amount	$ 200,000.00
	Interest Rate	7.000%
	Monthly interest	0.00583
	PMT=(Monthly Rate,Number of payments,Loan Amount)
	Monthly Payment	($1,797.21)
	Mortgage Balance at the end of 15 th year is Zero
	Loan Amortization Schedule
	Payment	Interest	Principal	Balance
0				200000.00
1	1797.21	1166.67	630.54	199369.46
2	1797.21	1162.99	634.22	198735.24
3	1797.21	1159.29	637.92	198097.31
4	1797.21	1155.57	641.64	197455.67
5	1797.21	1151.82	645.39	196810.29
6	1797.21	1148.06	649.15	196161.14
7	1797.21	1144.27	652.94	195508.20
8	1797.21	1140.46	656.75	194851.45
9	1797.21	1136.63	660.58	194190.88
10	1797.21	1132.78	664.43	193526.45
11	1797.21	1128.90	668.31	192858.14
12	1797.21	1125.01	672.20	192185.94
13	1797.21	1121.08	676.13	191509.81
14	1797.21	1117.14	680.07	190829.74
15	1797.21	1113.17	684.04	190145.71
16	1797.21	1109.18	688.03	189457.68
17	1797.21	1105.17	692.04	188765.64
18	1797.21	1101.13	696.08	188069.56
19	1797.21	1097.07	700.14	187369.43
20	1797.21	1092.99	704.22	186665.20
21	1797.21	1088.88	708.33	185956.87
22	1797.21	1084.75	712.46	185244.41
23	1797.21	1080.59	716.62	184527.79
24	1797.21	1076.41	720.80	183807.00
25	1797.21	1072.21	725.00	183081.99
26	1797.21	1067.98	729.23	182352.76
27	1797.21	1063.72	733.49	181619.28
28	1797.21	1059.45	737.76	180881.51
29	1797.21	1055.14	742.07	180139.44
30	1797.21	1050.81	746.40	179393.05
31	1797.21	1046.46	750.75	178642.30
32	1797.21	1042.08	755.13	177887.17
33	1797.21	1037.68	759.53	177127.63
34	1797.21	1033.24	763.97	176363.67
35	1797.21	1028.79	768.42	175595.25
36	1797.21	1024.31	772.90	174822.34
37	1797.21	1019.80	777.41	174044.93
38	1797.21	1015.26	781.95	173262.98
39	1797.21	1010.70	786.51	172476.47
40	1797.21	1006.11	791.10	171685.37
41	1797.21	1001.50	795.71	170889.66
42	1797.21	996.86	800.35	170089.31
43	1797.21	992.19	805.02	169284.29
44	1797.21	987.49	809.72	168474.57
45	1797.21	982.77	814.44	167660.13
46	1797.21	978.02	819.19	166840.93
47	1797.21	973.24	823.97	166016.96
48	1797.21	968.43	828.78	165188.18
49	1797.21	963.60	833.61	164354.57
50	1797.21	958.74	838.47	163516.10
51	1797.21	953.84	843.37	162672.73
52	1797.21	948.92	848.29	161824.45
53	1797.21	943.98	853.23	160971.21
54	1797.21	939.00	858.21	160113.00
55	1797.21	933.99	863.22	159249.78
56	1797.21	928.96	868.25	158381.53
57	1797.21	923.89	873.32	157508.21
58	1797.21	918.80	878.41	156629.80
59	1797.21	913.67	883.54	155746.26
60	1797.21	908.52	888.69	154857.57
61	1797.21	903.34	893.87	153963.70
62	1797.21	898.12	899.09	153064.61
63	1797.21	892.88	904.33	152160.28
64	1797.21	887.60	909.61	151250.67
65	1797.21	882.30	914.91	150335.75
66	1797.21	876.96	920.25	149415.50
67	1797.21	871.59	925.62	148489.88
68	1797.21	866.19	931.02	147558.86
69	1797.21	860.76	936.45	146622.41
70	1797.21	855.30	941.91	145680.50
71	1797.21	849.80	947.41	144733.10
72	1797.21	844.28	952.93	143780.16
73	1797.21	838.72	958.49	142821.67
74	1797.21	833.13	964.08	141857.59
75	1797.21	827.50	969.71	140887.88
76	1797.21	821.85	975.36	139912.51
77	1797.21	816.16	981.05	138931.46
78	1797.21	810.43	986.78	137944.68
79	1797.21	804.68	992.53	136952.15
80	1797.21	798.89	998.32	135953.83
81	1797.21	793.06	1004.15	134949.68
82	1797.21	787.21	1010.00	133939.68
83	1797.21	781.31	1015.90	132923.78
84	1797.21	775.39	1021.82	131901.96
85	1797.21	769.43	1027.78	130874.18
86	1797.21	763.43	1033.78	129840.40
87	1797.21	757.40	1039.81	128800.60
88	1797.21	751.34	1045.87	127754.72
89	1797.21	745.24	1051.97	126702.75
90	1797.21	739.10	1058.11	125644.64
91	1797.21	732.93	1064.28	124580.36
92	1797.21	726.72	1070.49	123509.86
93	1797.21	720.47	1076.74	122433.13
94	1797.21	714.19	1083.02	121350.11
95	1797.21	707.88	1089.33	120260.78
96	1797.21	701.52	1095.69	119165.09
97	1797.21	695.13	1102.08	118063.01
98	1797.21	688.70	1108.51	116954.50
99	1797.21	682.23	1114.98	115839.52
100	1797.21	675.73	1121.48	114718.04
101	1797.21	669.19	1128.02	113590.02
102	1797.21	662.61	1134.60	112455.42
103	1797.21	655.99	1141.22	111314.20
104	1797.21	649.33	1147.88	110166.32
105	1797.21	642.64	1154.57	109011.75
106	1797.21	635.90	1161.31	107850.44
107	1797.21	629.13	1168.08	106682.36
108	1797.21	622.31	1174.90	105507.46
109	1797.21	615.46	1181.75	104325.71
110	1797.21	608.57	1188.64	103137.07
111	1797.21	601.63	1195.58	101941.49
112	1797.21	594.66	1202.55	100738.94
113	1797.21	587.64	1209.57	99529.38
114	1797.21	580.59	1216.62	98312.75
115	1797.21	573.49	1223.72	97089.04
116	1797.21	566.35	1230.86	95858.18
117	1797.21	559.17	1238.04	94620.14
118	1797.21	551.95	1245.26	93374.88
119	1797.21	544.69	1252.52	92122.36
120	1797.21	537.38	1259.83	90862.53
121	1797.21	530.03	1267.18	89595.35
122	1797.21	522.64	1274.57	88320.78
123	1797.21	515.20	1282.01	87038.77
124	1797.21	507.73	1289.48	85749.29
125	1797.21	500.20	1297.01	84452.28
126	1797.21	492.64	1304.57	83147.71
127	1797.21	485.03	1312.18	81835.53
128	1797.21	477.37	1319.84	80515.70
129	1797.21	469.67	1327.54	79188.16
130	1797.21	461.93	1335.28	77852.88
131	1797.21	454.14	1343.07	76509.81
132	1797.21	446.31	1350.90	75158.91
133	1797.21	438.43	1358.78	73800.13
134	1797.21	430.50	1366.71	72433.42
135	1797.21	422.53	1374.68	71058.74
136	1797.21	414.51	1382.70	69676.04
137	1797.21	406.44	1390.77	68285.27
138	1797.21	398.33	1398.88	66886.39
139	1797.21	390.17	1407.04	65479.35
140	1797.21	381.96	1415.25	64064.10
141	1797.21	373.71	1423.50	62640.60
142	1797.21	365.40	1431.81	61208.79
143	1797.21	357.05	1440.16	59768.63
144	1797.21	348.65	1448.56	58320.08
145	1797.21	340.20	1457.01	56863.07
146	1797.21	331.70	1465.51	55397.56
147	1797.21	323.15	1474.06	53923.50
148	1797.21	314.55	1482.66	52440.84
149	1797.21	305.90	1491.31	50949.54
150	1797.21	297.21	1500.00	49449.53
151	1797.21	288.46	1508.75	47940.78
152	1797.21	279.65	1517.56	46423.22
153	1797.21	270.80	1526.41	44896.82
154	1797.21	261.90	1535.31	43361.50
155	1797.21	252.94	1544.27	41817.24
156	1797.21	243.93	1553.28	40263.96
157	1797.21	234.87	1562.34	38701.62
158	1797.21	225.76	1571.45	37130.17
159	1797.21	216.59	1580.62	35549.56
160	1797.21	207.37	1589.84	33959.72
161	1797.21	198.10	1599.11	32360.61
162	1797.21	188.77	1608.44	30752.17
163	1797.21	179.39	1617.82	29134.34
164	1797.21	169.95	1627.26	27507.08
165	1797.21	160.46	1636.75	25870.33
166	1797.21	150.91	1646.30	24224.03
167	1797.21	141.31	1655.90	22568.13
168	1797.21	131.65	1665.56	20902.57
169	1797.21	121.93	1675.28	19227.29
170	1797.21	112.16	1685.05	17542.24
171	1797.21	102.33	1694.88	15847.36
172	1797.21	92.44	1704.77	14142.59
173	1797.21	82.50	1714.71	12427.88
174	1797.21	72.50	1724.71	10703.16
175	1797.21	62.44	1734.77	8968.39
176	1797.21	52.32	1744.89	7223.50
177	1797.21	42.14	1755.07	5468.42
178	1797.21	31.90	1765.31	3703.11
179	1797.21	21.60	1775.61	1927.50
180	1797.21	130.29	1927.50	0.00
Total	323497.8	123758.38	200000.00

jeff jeffy answered 1 year ago

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Question

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Solutions

Expert Solution

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