You plan to borrow $100,000 at a 4.5% annual interest rate. The terms require you to...

You plan to borrow $100,000 at a 4.5% annual interest rate. The terms require you to amortize the loan over 15 years what is monthly payment and how much total interest would you be paying during the Year 1?

Expert Solution

Monthly Payment on loan is calculated in excel and screen shot provided below:

Monthly payment on loan is $764.99.

Outstanding balance of loan at end of year 1 is calculated in excel and screen shot provided below:

Outstanding balance of loan at end of year 1 is $95,222.34.

So total Principle paid in year 1 = $100,000 - $95,222.34

= $4,777.66.

Total Principle paid in year 1 is $4,777.66.

Total Interest paid in year 1 = ($764.99 × 12) - $4,777.66

= $9,179.92 - $4,777.66

= $4,402.26.

Total interest paid during year 1 is $4,402.26.

jeff jeffy answered 2 years ago

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