Question

In: Accounting

The monthly payment on a 900,000 , 20 yr. mortgage at 5.75% is $6,318.75 per month. How much of that 900,000 on day 1 is deemed to be "current portion of mortgage payable"?


The monthly payment on a 900,000 , 20 yr. mortgage at 5.75% is $6,318.75 per month. How much of that 900,000 on day 1 is deemed to be "current portion of mortgage payable"?

Solutions

Expert Solution

Note: since question is asking for current portion of mortgage
payable on day 1 , so on day 1 only principal payment payable
withing 1-12 months period is relevant
Using the excel cumprin formula
PV 900000
Rate 0.4792% (5.75%/12)
NPER 240 (20 x 12)
Start period 1
End period 12
Cumprinc $                                                          (24,718.62)
=CUMPRINC(0.4792%,240,900000,1,12,0)
So current portion of mortgage payable on day 1 will be $24,718.62

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