Question

5. Suppose that you and your spouse have recently purchased a house with a loan of $50,000. The terms were 15 percent interest and annual payments of $7,988.07 for 20 years. What proportion of the loan will have been paid off after 20 years? 5 years? 8 years? 12 years?

Answer 1

	a	b	c	d=c-b	a-d
Year	Principal	Interest 15%	Installment	Principal Repayment	Closing
1	50,000.00	7,500.00	7,988.07	488.07	49,511.93
2	49,511.93	7,426.79	7,988.07	561.28	48,950.65
3	48,950.65	7,342.60	7,988.07	645.47	48,305.18
4	48,305.18	7,245.78	7,988.07	742.29	47,562.88
5	47,562.88	7,134.43	7,988.07	853.64	46,709.25
6	46,709.25	7,006.39	7,988.07	981.68	45,727.56
7	45,727.56	6,859.13	7,988.07	1,128.94	44,598.63
8	44,598.63	6,689.79	7,988.07	1,298.28	43,300.35
9	43,300.35	6,495.05	7,988.07	1,493.02	41,807.33
10	41,807.33	6,271.10	7,988.07	1,716.97	40,090.36
11	40,090.36	6,013.55	7,988.07	1,974.52	38,115.85
12	38,115.85	5,717.38	7,988.07	2,270.69	35,845.16
13	35,845.16	5,376.77	7,988.07	2,611.30	33,233.86
14	33,233.86	4,985.08	7,988.07	3,002.99	30,230.87
15	30,230.87	4,534.63	7,988.07	3,453.44	26,777.43
16	26,777.43	4,016.61	7,988.07	3,971.46	22,805.97
17	22,805.97	3,420.90	7,988.07	4,567.17	18,238.80
18	18,238.80	2,735.82	7,988.07	5,252.25	12,986.55
19	12,986.55	1,947.98	7,988.07	6,040.09	6,946.46
20	6,946.46	1,041.97	7,988.07	6,946.46	0.00

From the above we get

Year	Portion of loan paid
5	853.64
8	1,298.28
12	2,270.69
20	6,946.46