After working for three years, you decide to purchase your first home, which has a sales...

After working for three years, you decide to purchase your first home, which has a sales price of $350,000. With $70,000 down payment, what is your monthly mortgage payments for a 30-year loan at an annual interest rate of 4.75%. Assume the payments are made at the end of each period (i.e., ordinary annuity).

a) Calculate the monthly installments

b) Build an amortization table for the life of loan. For each payment, show the beginning loan balance, interest payment, principal payment, and ending balance.

Solutions

Expert Solution

Given,

Loan amount = $ 350000

Down payment = $ 70000

Loan period = 30 years

rate of interest (r) = 4.75% or 0.0475

No. of payments (n) = 30 years x 12 months = 360

Principal amount = 350000 - 70000 = 280000

b) Build an amortization table for the life of loan. For each payment, show the beginning loan balance, interest payment, principal payment, and ending balance.

The last closing balance of 2.02 is due to rounding off the calculations.

Monthly installment calculated in the excel is different from manual calculation. Because I have rounded off the calculations in manual calculation.

jeff jeffy answered 1 month ago

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