Question

You take out a $200,000 mortgage for 20 years at 6%.

a. What is your monthly payment?

b. What is the principle and interest on the first payment?

c. What is the principle and interest on the twelfth payment?

d. How much interest will you pay over the 20 years?

Answer 1

Loan amount		$200,000
Interest		6%
Years		20

 

Month	Loan Payment		Interest	Payment	Balance
0	$1,432.86		6%	0	$200,000
1	$1,432.86		1000	$432.86	$199,567.14
2	$1,432.86		997.84	$435.03	$199,132.11
3	$1,432.86		995.66	$437.20	$198,694.91
4	$1,432.86		993.47	$439.39	$198,255.52
5	$1,432.86		991.28	$441.58	$197,813.94
6	$1,432.86		989.07	$443.79	$197,370.15
7	$1,432.86		986.85	$446.01	$196,924.13
8	$1,432.86		984.62	$448.24	$196,475.89
9	$1,432.86		982.38	$450.48	$196,025.41
10	$1,432.86		980.13	$452.74	$195,572.67
11	$1,432.86		977.86	$455.00	$195,117.68
12	$1,432.86		975.59	$457.27	$194,660.40

 

a.

Monthly Payment =		PMT(0.06/12, 20*12, -200,000)
	=	$1,432.86

 

b.

Principle	$432.86
Interest	$1,000.00

 

c.

Principle	$457.27
Interest	$975.59

 

d.

Annual Payment	$17,194	(1,432.86*12)
Interest	$143,886.91		($17,194 * 20 years - 200,000)

 

($17,194 * 20 years - 200,000)