Question

In: Finance

Please show your working and formula (If possible) -------------------------- Suppose you take out an $840,000, 20-year...

Please show your working and formula (If possible)

--------------------------

Suppose you take out an $840,000, 20-year mortgage loan to buy a residential apartment. The interest rate on the mortgage is 4.65% per annum, and payments are required to be made annually at the end of each year.

Question:

Construct a mortgage amortisation table showing loan balance at the beginning of each period, annual repayment amount, interest payment, the amortisation of the loan and the loan balance for each year.

Solutions

Expert Solution

Sl. Beginning Interest Principal Repayment amountt Balance
1 840000 39060 26358.02 65418.02 813641.98
2 813641.98 37834.35 27583.67 65418.02 786058.32
3 786058.32 36551.71 28866.31 65418.02 757192.01
4 757192.01 35209.43 30208.59 65418.02 726983.43
5 726983.43 33804.73 31613.29 65418.02 695370.14
6 695370.14 32334.71 33083.31 65418.02 662286.84
7 662286.84 30796.34 34621.68 65418.02 627665.16
8 627665.16 29186.43 36231.59 65418.02 591433.57
9 591433.57 27501.66 37916.36 65418.02 553517.22
10 553517.22 25738.55 39679.47 65418.02 513837.75
11 513837.75 23893.46 41524.56 65418.02 472313.2
12 472313.2 21962.56 43455.46 65418.02 428857.74
13 428857.74 19941.88 45476.14 65418.02 383381.6
14 383381.6 17827.24 47590.78 65418.02 335790.83
15 335790.83 15614.27 49803.75 65418.02 285987.08
16 285987.08 13298.4 52119.62 65418.02 233867.47
17 233867.47 10874.84 54543.18 65418.02 179324.29
18 179324.29 8338.58 57079.44 65418.02 122244.86
19 122244.86 5684.39 59733.63 65418.02 62511.23
20 62511.23 2906.77 62511.25 65418.02 0

Interest = Previous balance * interest rate

Principal = Yearly payment - interest

Balance = Previous balance - principal


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