Question

A couple has decided to purchase a $240000 house using a down payment of $30000. They can amortize the balance at 10% over 20 years.

a) What is their monthly payment?

Answer = $

b) What is the total interest paid?

Answer = $

c) How much of their first payment went toward paying interest?

Answer = $

d) How much of their first payment went toward paying the balance of the loan.

Answer = $

Answer 1

a)
	Monthly Payment		=-pmt(rate,nper,pv,fv)
			= $2,026.55
	Where,
	rate	=	Monthly Interest rate	=	10%/12	=	0.008333333
	nper	=	Number of Period	=	20*12	=	240
	pv	=	Loan Amount	=	240000-30000	=	$2,10,000.00
	fv	=	Future Value			=	0
b)	Total interest Paid	=	Total repayment	-	Total Loan
		=	(monthly payment*Number of months)	-	Total Loan
		=	(2026.55*240)	-	$2,10,000.00
		=	$4,86,370.91	-	$2,10,000.00
		=	$2,76,370.91
c)	Interest	=	Beginning Loan	*	Monthly Interest
		=	$2,10,000.00	*	0.008333333
		=	$1,750.00
d)	Balance of Loan	=	Monthly Payment	-	Interest
		=	$2,026.55	-	$1,750.00
		=	$276.55