Question

I have bought a house for $300,000. I made a 20% down payment and borrowed the rest at 4.2% APR with monthly compounding. It is a 30-year amortized loan. Prepare the first two rows of the amortization table (beginning balance, PMT, interest paid, principal paid, ending balance).

Answer 1

Loan amount = Price of House*(1-% of downpayment) = $300,000*(1-0.20)

= $240,000

Calculating the Monthly loan Payment:-

Where, P = Loan amount = $240,000

r = Periodic Interest rate = 4.2%/12 = 0.35%

n= no of periods = 30 years*12 = 360

Monthly payment = $1173.64

- Preparing the amortization table for first two rows:-

Year	Beg bal.	Payment(PMT)	Interest Paid	Principal Paid	End Balance
1	240,000.00	1,173.64	840.00	333.64	239,666.36
2	239,666.36	1,173.64	838.83	334.81	239,331.55

Note- The following Columns are calculated based on:

- Interest amount = beg. Balnace*Monthly interest rate

- Principal maount = Payment - Interest amount

- End Bal. = Beg. Bal + Interest - Payment

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