A 25 years $500000 mortgage at 4.30% compounded semi annually is repaid with monthly payment what...

A 25 years $500000 mortgage at 4.30% compounded semi annually is repaid with monthly payment what is size of monthly payment and balance of mortgage at end of 6 years and how much did the amortization period shorten by if the monthly payment are increased by $125 at end of year six?

Expert Solution

At the end of year 6 the Principle balance is $423,325.97, the monthly installments are $2,711.49 from Month 1 to 72.

Payment Number	Payment	Principal	Interest	Balance
1	$ -2,711.49	$ -936.49	$ -1,775.00	$ 499,063.51
2	$ -2,711.49	$ -939.82	$ -1,771.68	$ 498,123.69
3	$ -2,711.49	$ -943.15	$ -1,768.34	$ 497,180.54
4	$ -2,711.49	$ -946.50	$ -1,764.99	$ 496,234.04
5	$ -2,711.49	$ -949.86	$ -1,761.63	$ 495,284.18
6	$ -2,711.49	$ -953.23	$ -1,758.26	$ 494,330.95
7	$ -2,711.49	$ -956.62	$ -1,754.87	$ 493,374.33
8	$ -2,711.49	$ -960.01	$ -1,751.48	$ 492,414.32
9	$ -2,711.49	$ -963.42	$ -1,748.07	$ 491,450.90
10	$ -2,711.49	$ -966.84	$ -1,744.65	$ 490,484.06
11	$ -2,711.49	$ -970.27	$ -1,741.22	$ 489,513.79
12	$ -2,711.49	$ -973.72	$ -1,737.77	$ 488,540.07
13	$ -2,711.49	$ -977.17	$ -1,734.32	$ 487,562.90
14	$ -2,711.49	$ -980.64	$ -1,730.85	$ 486,582.26
15	$ -2,711.49	$ -984.12	$ -1,727.37	$ 485,598.13
16	$ -2,711.49	$ -987.62	$ -1,723.87	$ 484,610.51
17	$ -2,711.49	$ -991.12	$ -1,720.37	$ 483,619.39
18	$ -2,711.49	$ -994.64	$ -1,716.85	$ 482,624.75
19	$ -2,711.49	$ -998.17	$ -1,713.32	$ 481,626.58
20	$ -2,711.49	$ -1,001.72	$ -1,709.77	$ 480,624.86
21	$ -2,711.49	$ -1,005.27	$ -1,706.22	$ 479,619.59
22	$ -2,711.49	$ -1,008.84	$ -1,702.65	$ 478,610.74
23	$ -2,711.49	$ -1,012.42	$ -1,699.07	$ 477,598.32
24	$ -2,711.49	$ -1,016.02	$ -1,695.47	$ 476,582.30
25	$ -2,711.49	$ -1,019.62	$ -1,691.87	$ 475,562.68
26	$ -2,711.49	$ -1,023.24	$ -1,688.25	$ 474,539.44
27	$ -2,711.49	$ -1,026.88	$ -1,684.62	$ 473,512.56
28	$ -2,711.49	$ -1,030.52	$ -1,680.97	$ 472,482.04
29	$ -2,711.49	$ -1,034.18	$ -1,677.31	$ 471,447.86
30	$ -2,711.49	$ -1,037.85	$ -1,673.64	$ 470,410.01
31	$ -2,711.49	$ -1,041.54	$ -1,669.96	$ 469,368.47
32	$ -2,711.49	$ -1,045.23	$ -1,666.26	$ 468,323.24
33	$ -2,711.49	$ -1,048.94	$ -1,662.55	$ 467,274.30
34	$ -2,711.49	$ -1,052.67	$ -1,658.82	$ 466,221.63
35	$ -2,711.49	$ -1,056.40	$ -1,655.09	$ 465,165.23
36	$ -2,711.49	$ -1,060.15	$ -1,651.34	$ 464,105.07
37	$ -2,711.49	$ -1,063.92	$ -1,647.57	$ 463,041.15
38	$ -2,711.49	$ -1,067.69	$ -1,643.80	$ 461,973.46
39	$ -2,711.49	$ -1,071.49	$ -1,640.01	$ 460,901.97
40	$ -2,711.49	$ -1,075.29	$ -1,636.20	$ 459,826.69
41	$ -2,711.49	$ -1,079.11	$ -1,632.38	$ 458,747.58
42	$ -2,711.49	$ -1,082.94	$ -1,628.55	$ 457,664.64
43	$ -2,711.49	$ -1,086.78	$ -1,624.71	$ 456,577.86
44	$ -2,711.49	$ -1,090.64	$ -1,620.85	$ 455,487.22
45	$ -2,711.49	$ -1,094.51	$ -1,616.98	$ 454,392.71
46	$ -2,711.49	$ -1,098.40	$ -1,613.09	$ 453,294.31
47	$ -2,711.49	$ -1,102.30	$ -1,609.19	$ 452,192.02
48	$ -2,711.49	$ -1,106.21	$ -1,605.28	$ 451,085.81
49	$ -2,711.49	$ -1,110.14	$ -1,601.35	$ 449,975.67
50	$ -2,711.49	$ -1,114.08	$ -1,597.41	$ 448,861.59
51	$ -2,711.49	$ -1,118.03	$ -1,593.46	$ 447,743.56
52	$ -2,711.49	$ -1,122.00	$ -1,589.49	$ 446,621.56
53	$ -2,711.49	$ -1,125.98	$ -1,585.51	$ 445,495.58
54	$ -2,711.49	$ -1,129.98	$ -1,581.51	$ 444,365.59
55	$ -2,711.49	$ -1,133.99	$ -1,577.50	$ 443,231.60
56	$ -2,711.49	$ -1,138.02	$ -1,573.47	$ 442,093.58
57	$ -2,711.49	$ -1,142.06	$ -1,569.43	$ 440,951.52
58	$ -2,711.49	$ -1,146.11	$ -1,565.38	$ 439,805.41
59	$ -2,711.49	$ -1,150.18	$ -1,561.31	$ 438,655.23
60	$ -2,711.49	$ -1,154.26	$ -1,557.23	$ 437,500.96
61	$ -2,711.49	$ -1,158.36	$ -1,553.13	$ 436,342.60
62	$ -2,711.49	$ -1,162.47	$ -1,549.02	$ 435,180.13
63	$ -2,711.49	$ -1,166.60	$ -1,544.89	$ 434,013.53
64	$ -2,711.49	$ -1,170.74	$ -1,540.75	$ 432,842.78
65	$ -2,711.49	$ -1,174.90	$ -1,536.59	$ 431,667.88
66	$ -2,711.49	$ -1,179.07	$ -1,532.42	$ 430,488.81
67	$ -2,711.49	$ -1,183.26	$ -1,528.24	$ 429,305.56
68	$ -2,711.49	$ -1,187.46	$ -1,524.03	$ 428,118.10
69	$ -2,711.49	$ -1,191.67	$ -1,519.82	$ 426,926.43
70	$ -2,711.49	$ -1,195.90	$ -1,515.59	$ 425,730.53
71	$ -2,711.49	$ -1,200.15	$ -1,511.34	$ 424,530.38
72	$ -2,711.49	$ -1,204.41	$ -1,507.08	$ 423,325.97

New Monthly payment amount = $2,836.49. The remaining amortization period is 212.95 months or 17.75 years approx. The amortization period has been shortened by 1.25 years.

Formula used =NPER(EffRate/12,Payment, -Principal)

jeff jeffy answered 2 years ago

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