Question

You take out a 30-year $500,000 mortgage at an effective annual interest rate of 8%. Immediately after your 12th payment, you make an additional principal repayment of $50,000, and then refinance the outstanding balance with a new 15-yeatr mortgage at a 4% effective annual interest rate. Both mortgages require annual year-end level amortization payments. Find the amount of interest in the 5th payment of the new mortgage.

PLEASE NO EXCEL!!!! :)

Answer 1

	Principle	500000	366,240.34
	Interest rate	8%	4%
	Years	30	15
	emi	-44,413.72	-32,940.06	(Principal * Interest rate * (1+Interest rate)^Years) / (1+Interest rate)^Years-1
	Beg. Principal	Interest	EMI	Ending principal
1	500,000.0	40,000.0	(44,413.7)	495,586.3
2	495,586.3	39,646.9	(44,413.7)	490,819.5
3	490,819.5	39,265.6	(44,413.7)	485,671.3
4	485,671.3	38,853.7	(44,413.7)	480,111.3
5	480,111.3	38,408.9	(44,413.7)	474,106.5
6	474,106.5	37,928.5	(44,413.7)	467,621.3
7	467,621.3	37,409.7	(44,413.7)	460,617.3
8	460,617.3	36,849.4	(44,413.7)	453,052.9
9	453,052.9	36,244.2	(44,413.7)	444,883.5
10	444,883.5	35,590.7	(44,413.7)	436,060.4
11	436,060.4	34,884.8	(44,413.7)	426,531.5
12	426,531.5	34,122.5	(94,413.7)	366,240.3
13	366,240.3	14,649.6	(32,940.1)	347,949.9
14	347,949.9	13,918.0	(32,940.1)	328,927.8
15	328,927.8	13,157.1	(32,940.1)	309,144.9
16	309,144.9	12,365.8	(32,940.1)	288,570.6
17	288,570.6	11,542.8	(32,940.1)	267,173.4

5th year interest : 11542