Suppose you have taken out a $125,000 fully-amortizing fixed rate mortgage loan that has a term of 15 years and an interest rate of 6%.

Show work through excel formulas: please actually show how you do it on excel exactly!

1. Suppose you have taken out a $125,000 fully-amortizing fixed rate mortgage loan that has a term of 15 years and an interest rate of 6%. After your first mortgage payment, how much of the original loan balance is remaining?  

A. $1,054.82 B. $120,603.78 C. $124,570.18 D. $124,875.56

2. Assume you have taken out a partially amortizing loan for $325,000 that has a term of 7 years, but amortizes over 30 years. Calculate the balloon payment at maturity (Year 7) if the interest rate on this loan is 4.5%.  

A. $1,646.73 B. $118,468.21 C. $282,835.42 D. $324,572.02

Solutions

Expert Solution

Loan amount	$ 125,000.00
Term in years	15
Total number of payments	180
Annual Interest rate	6%
Monthly Interest rate	0.50%
Monthly payment	$1,054.82
Principal paid in the first payment	$ 429.82
Loan Balance	$ 124,570.18

Excel formulas:

Loan amount	$ 325,000.00
Amortizing term in years	30
Amortizing term in month	360
Annual interest rate	4.50%
Monthly interest rate	0.375%
Monthly payment	$1,646.73
Number of payment upto 7 years	84
Principal paid upto 7 years	$ 42,164.58
Balloon payment	$ 282,835.42

Excel formulas:

jeff jeffy answered 1 year ago

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