Question

Suppose you bought a new home for $210,000 using a 33-year mortgage with semiannual payments of $6,609.301. The annual interest rate of the mortgage is 5.1%. Right after the first 7 years (26 years left), approximately how much money have you paid in interest and how much in principal?

Answer 1

Sol:

Home value (PV) = $210,000

Period (NPER) = 33 years, Semiannual = 33 * 2 = 66

Semiannual coupon payment =  $6,609.301

Annual interest rate = 5.1%, Semiannual = 5.1 / 2 = 2.55%

Amortization schedule:

Year	Opening balance	Semiannual payment	Principal	Interest	Closing balance
0.5	$210,000	$6,609.30	$1,254.30	$5,355.00	$208,745.70
1	$208,745.70	$6,609.30	$1,286.29	$5,323.02	$207,459.41
1.5	$207,459.41	$6,609.30	$1,319.09	$5,290.22	$206,140.33
2	$206,140.33	$6,609.30	$1,352.72	$5,256.58	$204,787.60
2.5	$204,787.60	$6,609.30	$1,387.22	$5,222.08	$203,400.39
3	$203,400.39	$6,609.30	$1,422.59	$5,186.71	$201,977.80
3.5	$201,977.80	$6,609.30	$1,458.87	$5,150.43	$200,518.93
4	$200,518.93	$6,609.30	$1,496.07	$5,113.23	$199,022.86
4.5	$199,022.86	$6,609.30	$1,534.22	$5,075.08	$197,488.64
5	$197,488.64	$6,609.30	$1,573.34	$5,035.96	$195,915.30
5.5	$195,915.30	$6,609.30	$1,613.46	$4,995.84	$194,301.84
6	$194,301.84	$6,609.30	$1,654.60	$4,954.70	$192,647.24
6.5	$192,647.24	$6,609.30	$1,696.80	$4,912.50	$190,950.44
7	$190,950.44	$6,609.30	$1,740.06	$4,869.24	$189,210.38
			$20,789.62	$71,740.59

Therefore money have you paid in interest will be $71,740.59 and principal will be $20,789.62

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