Question

Suppose that you are considering a conventional, fixed-rate 15-year mortgage loan for $300,000. The lender quotes an APR of 4%, compounded monthly; mortgage payments would be monthly, beginning one month after the closing on your home purchase. In the tenth year of your mortgage (months 109 through 120), what would be the total dollar amount of the interest paid? Do not round at intermediate steps in your calculation.

Answer 1

	Mortgage loan amount	$300,000
	Monthly interest	0.003333	(4/12)%=	0.33%
	Number of months of loan	180	(15*12)
	Monthly payment	$2,219.06	Using PMT function of excel with Rate=(4/12)%,Nper=180,PV=-300000
				Using IPMT function	Using PPMT function
				Per=N, Nper=180, PV=-300000	Per=N, Nper=180, PV=-300000
	N	A	B	C	D	E=A-D
	Month	Beginning	Monthly	Interest	Principal	Ending
		Balance	Payment			Balance
	1	$300,000	$2,219.06	$1,000.00	$1,219.06	$298,780.94
	2	$298,780.94	$2,219.06	$995.94	$1,223.13	$297,557.81
	3	$297,557.81	$2,219.06	$991.86	$1,227.20	$296,330.60
	4	$296,330.60	$2,219.06	$987.77	$1,231.30	$295,099.31
	5	$295,099.31	$2,219.06	$983.66	$1,235.40	$293,863.91
	6	$293,863.91	$2,219.06	$979.55	$1,239.52	$292,624.39
	7	$292,624.39	$2,219.06	$975.41	$1,243.65	$291,380.74
	8	$291,380.74	$2,219.06	$971.27	$1,247.79	$290,132.95
	9	$290,132.95	$2,219.06	$967.11	$1,251.95	$288,880.99
	10	$288,880.99	$2,219.06	$962.94	$1,256.13	$287,624.87
	11	$287,624.87	$2,219.06	$958.75	$1,260.31	$286,364.55
	12	$286,364.55	$2,219.06	$954.55	$1,264.52	$285,100.04
	13	$285,100.04	$2,219.06	$950.33	$1,268.73	$283,831.31
	14	$283,831.31	$2,219.06	$946.10	$1,272.96	$282,558.35
	15	$282,558.35	$2,219.06	$941.86	$1,277.20	$281,281.15
	16	$281,281.15	$2,219.06	$937.60	$1,281.46	$279,999.69
	17	$279,999.69	$2,219.06	$933.33	$1,285.73	$278,713.95
	18	$278,713.95	$2,219.06	$929.05	$1,290.02	$277,423.94
	19	$277,423.94	$2,219.06	$924.75	$1,294.32	$276,129.62
	20	$276,129.62	$2,219.06	$920.43	$1,298.63	$274,830.99
	21	$274,830.99	$2,219.06	$916.10	$1,302.96	$273,528.03
	22	$273,528.03	$2,219.06	$911.76	$1,307.30	$272,220.72
	23	$272,220.72	$2,219.06	$907.40	$1,311.66	$270,909.06
	24	$270,909.06	$2,219.06	$903.03	$1,316.03	$269,593.03
	25	$269,593.03	$2,219.06	$898.64	$1,320.42	$268,272.61
	26	$268,272.61	$2,219.06	$894.24	$1,324.82	$266,947.79
	27	$266,947.79	$2,219.06	$889.83	$1,329.24	$265,618.55
	28	$265,618.55	$2,219.06	$885.40	$1,333.67	$264,284.88
	29	$264,284.88	$2,219.06	$880.95	$1,338.11	$262,946.77
	30	$262,946.77	$2,219.06	$876.49	$1,342.57	$261,604.19
	31	$261,604.19	$2,219.06	$872.01	$1,347.05	$260,257.14
	32	$260,257.14	$2,219.06	$867.52	$1,351.54	$258,905.60
	33	$258,905.60	$2,219.06	$863.02	$1,356.05	$257,549.56
	34	$257,549.56	$2,219.06	$858.50	$1,360.57	$256,188.99
	35	$256,188.99	$2,219.06	$853.96	$1,365.10	$254,823.89
	36	$254,823.89	$2,219.06	$849.41	$1,369.65	$253,454.24
	37	$253,454.24	$2,219.06	$844.85	$1,374.22	$252,080.02
	38	$252,080.02	$2,219.06	$840.27	$1,378.80	$250,701.23
	39	$250,701.23	$2,219.06	$835.67	$1,383.39	$249,317.83
	40	$249,317.83	$2,219.06	$831.06	$1,388.00	$247,929.83
	41	$247,929.83	$2,219.06	$826.43	$1,392.63	$246,537.20
	42	$246,537.20	$2,219.06	$821.79	$1,397.27	$245,139.93
	43	$245,139.93	$2,219.06	$817.13	$1,401.93	$243,737.99
	44	$243,737.99	$2,219.06	$812.46	$1,406.60	$242,331.39
	45	$242,331.39	$2,219.06	$807.77	$1,411.29	$240,920.10
	46	$240,920.10	$2,219.06	$803.07	$1,416.00	$239,504.10
	47	$239,504.10	$2,219.06	$798.35	$1,420.72	$238,083.39
	48	$238,083.39	$2,219.06	$793.61	$1,425.45	$236,657.93
	49	$236,657.93	$2,219.06	$788.86	$1,430.20	$235,227.73
	50	$235,227.73	$2,219.06	$784.09	$1,434.97	$233,792.76
	51	$233,792.76	$2,219.06	$779.31	$1,439.75	$232,353.00
	52	$232,353.00	$2,219.06	$774.51	$1,444.55	$230,908.45
	53	$230,908.45	$2,219.06	$769.69	$1,449.37	$229,459.08
	54	$229,459.08	$2,219.06	$764.86	$1,454.20	$228,004.88
	55	$228,004.88	$2,219.06	$760.02	$1,459.05	$226,545.83
	56	$226,545.83	$2,219.06	$755.15	$1,463.91	$225,081.92
	57	$225,081.92	$2,219.06	$750.27	$1,468.79	$223,613.13
	58	$223,613.13	$2,219.06	$745.38	$1,473.69	$222,139.44
	59	$222,139.44	$2,219.06	$740.46	$1,478.60	$220,660.84
	60	$220,660.84	$2,219.06	$735.54	$1,483.53	$219,177.32
	61	$219,177.32	$2,219.06	$730.59	$1,488.47	$217,688.84
	62	$217,688.84	$2,219.06	$725.63	$1,493.43	$216,195.41
	63	$216,195.41	$2,219.06	$720.65	$1,498.41	$214,697.00
	64	$214,697.00	$2,219.06	$715.66	$1,503.41	$213,193.59
	65	$213,193.59	$2,219.06	$710.65	$1,508.42	$211,685.17
	66	$211,685.17	$2,219.06	$705.62	$1,513.45	$210,171.73
	67	$210,171.73	$2,219.06	$700.57	$1,518.49	$208,653.23
	68	$208,653.23	$2,219.06	$695.51	$1,523.55	$207,129.68
	69	$207,129.68	$2,219.06	$690.43	$1,528.63	$205,601.05
	70	$205,601.05	$2,219.06	$685.34	$1,533.73	$204,067.32
	71	$204,067.32	$2,219.06	$680.22	$1,538.84	$202,528.48
	72	$202,528.48	$2,219.06	$675.09	$1,543.97	$200,984.51
	73	$200,984.51	$2,219.06	$669.95	$1,549.12	$199,435.40
	74	$199,435.40	$2,219.06	$664.78	$1,554.28	$197,881.12
	75	$197,881.12	$2,219.06	$659.60	$1,559.46	$196,321.66
	76	$196,321.66	$2,219.06	$654.41	$1,564.66	$194,757.00
	77	$194,757.00	$2,219.06	$649.19	$1,569.87	$193,187.13
	78	$193,187.13	$2,219.06	$643.96	$1,575.11	$191,612.02
	79	$191,612.02	$2,219.06	$638.71	$1,580.36	$190,031.66
	80	$190,031.66	$2,219.06	$633.44	$1,585.62	$188,446.04
	81	$188,446.04	$2,219.06	$628.15	$1,590.91	$186,855.13
	82	$186,855.13	$2,219.06	$622.85	$1,596.21	$185,258.92
	83	$185,258.92	$2,219.06	$617.53	$1,601.53	$183,657.38
	84	$183,657.38	$2,219.06	$612.19	$1,606.87	$182,050.51
	85	$182,050.51	$2,219.06	$606.84	$1,612.23	$180,438.28
	86	$180,438.28	$2,219.06	$601.46	$1,617.60	$178,820.68
	87	$178,820.68	$2,219.06	$596.07	$1,622.99	$177,197.68
	88	$177,197.68	$2,219.06	$590.66	$1,628.40	$175,569.28
	89	$175,569.28	$2,219.06	$585.23	$1,633.83	$173,935.45
	90	$173,935.45	$2,219.06	$579.78	$1,639.28	$172,296.17
	91	$172,296.17	$2,219.06	$574.32	$1,644.74	$170,651.42
	92	$170,651.42	$2,219.06	$568.84	$1,650.23	$169,001.20
	93	$169,001.20	$2,219.06	$563.34	$1,655.73	$167,345.47
	94	$167,345.47	$2,219.06	$557.82	$1,661.25	$165,684.23
	95	$165,684.23	$2,219.06	$552.28	$1,666.78	$164,017.44
	96	$164,017.44	$2,219.06	$546.72	$1,672.34	$162,345.10
	97	$162,345.10	$2,219.06	$541.15	$1,677.91	$160,667.19
	98	$160,667.19	$2,219.06	$535.56	$1,683.51	$158,983.68
	99	$158,983.68	$2,219.06	$529.95	$1,689.12	$157,294.57
	100	$157,294.57	$2,219.06	$524.32	$1,694.75	$155,599.82
	101	$155,599.82	$2,219.06	$518.67	$1,700.40	$153,899.42
	102	$153,899.42	$2,219.06	$513.00	$1,706.07	$152,193.35
	103	$152,193.35	$2,219.06	$507.31	$1,711.75	$150,481.60
	104	$150,481.60	$2,219.06	$501.61	$1,717.46	$148,764.14
	105	$148,764.14	$2,219.06	$495.88	$1,723.18	$147,040.96
	106	$147,040.96	$2,219.06	$490.14	$1,728.93	$145,312.03
	107	$145,312.03	$2,219.06	$484.37	$1,734.69	$143,577.34
	108	$143,577.34	$2,219.06	$478.59	$1,740.47	$141,836.87
	109	$141,836.87	$2,219.06	$472.79	$1,746.27	$140,090.59
	110	$140,090.59	$2,219.06	$466.97	$1,752.10	$138,338.50
	111	$138,338.50	$2,219.06	$461.13	$1,757.94	$136,580.56
	112	$136,580.56	$2,219.06	$455.27	$1,763.80	$134,816.77
	113	$134,816.77	$2,219.06	$449.39	$1,769.67	$133,047.09
	114	$133,047.09	$2,219.06	$443.49	$1,775.57	$131,271.52
	115	$131,271.52	$2,219.06	$437.57	$1,781.49	$129,490.03
	116	$129,490.03	$2,219.06	$431.63	$1,787.43	$127,702.60
	117	$127,702.60	$2,219.06	$425.68	$1,793.39	$125,909.21
	118	$125,909.21	$2,219.06	$419.70	$1,799.37	$124,109.84
	119	$124,109.84	$2,219.06	$413.70	$1,805.36	$122,304.48
	120	$122,304.48	$2,219.06	$407.68	$1,811.38	$120,493.10
	121	$120,493.10	$2,219.06	$401.64	$1,817.42	$118,675.68
	122	$118,675.68	$2,219.06	$395.59	$1,823.48	$116,852.20
	123	$116,852.20	$2,219.06	$389.51	$1,829.56	$115,022.64
	124	$115,022.64	$2,219.06	$383.41	$1,835.65	$113,186.99
	125	$113,186.99	$2,219.06	$377.29	$1,841.77	$111,345.21
	126	$111,345.21	$2,219.06	$371.15	$1,847.91	$109,497.30
	127	$109,497.30	$2,219.06	$364.99	$1,854.07	$107,643.23
	128	$107,643.23	$2,219.06	$358.81	$1,860.25	$105,782.97
	129	$105,782.97	$2,219.06	$352.61	$1,866.45	$103,916.52
	130	$103,916.52	$2,219.06	$346.39	$1,872.68	$102,043.85
	131	$102,043.85	$2,219.06	$340.15	$1,878.92	$100,164.93
	132	$100,164.93	$2,219.06	$333.88	$1,885.18	$98,279.75
	133	$98,279.75	$2,219.06	$327.60	$1,891.46	$96,388.28
	134	$96,388.28	$2,219.06	$321.29	$1,897.77	$94,490.51
	135	$94,490.51	$2,219.06	$314.97	$1,904.10	$92,586.42
	136	$92,586.42	$2,219.06	$308.62	$1,910.44	$90,675.98
	137	$90,675.98	$2,219.06	$302.25	$1,916.81	$88,759.16
	138	$88,759.16	$2,219.06	$295.86	$1,923.20	$86,835.96
	139	$86,835.96	$2,219.06	$289.45	$1,929.61	$84,906.35
	140	$84,906.35	$2,219.06	$283.02	$1,936.04	$82,970.31
	141	$82,970.31	$2,219.06	$276.57	$1,942.50	$81,027.82
	142	$81,027.82	$2,219.06	$270.09	$1,948.97	$79,078.84
	143	$79,078.84	$2,219.06	$263.60	$1,955.47	$77,123.38
	144	$77,123.38	$2,219.06	$257.08	$1,961.99	$75,161.39
	145	$75,161.39	$2,219.06	$250.54	$1,968.53	$73,192.87
	146	$73,192.87	$2,219.06	$243.98	$1,975.09	$71,217.78
	147	$71,217.78	$2,219.06	$237.39	$1,981.67	$69,236.11
	148	$69,236.11	$2,219.06	$230.79	$1,988.28	$67,247.83
	149	$67,247.83	$2,219.06	$224.16	$1,994.90	$65,252.93
	150	$65,252.93	$2,219.06	$217.51	$2,001.55	$63,251.37
	151	$63,251.37	$2,219.06	$210.84	$2,008.23	$61,243.15
	152	$61,243.15	$2,219.06	$204.14	$2,014.92	$59,228.23
	153	$59,228.23	$2,219.06	$197.43	$2,021.64	$57,206.59
	154	$57,206.59	$2,219.06	$190.69	$2,028.38	$55,178.21
	155	$55,178.21	$2,219.06	$183.93	$2,035.14	$53,143.08
	156	$53,143.08	$2,219.06	$177.14	$2,041.92	$51,101.16
	157	$51,101.16	$2,219.06	$170.34	$2,048.73	$49,052.43
	158	$49,052.43	$2,219.06	$163.51	$2,055.56	$46,996.87
	159	$46,996.87	$2,219.06	$156.66	$2,062.41	$44,934.47
	160	$44,934.47	$2,219.06	$149.78	$2,069.28	$42,865.19
	161	$42,865.19	$2,219.06	$142.88	$2,076.18	$40,789.01
	162	$40,789.01	$2,219.06	$135.96	$2,083.10	$38,705.91
	163	$38,705.91	$2,219.06	$129.02	$2,090.04	$36,615.86
	164	$36,615.86	$2,219.06	$122.05	$2,097.01	$34,518.85
	165	$34,518.85	$2,219.06	$115.06	$2,104.00	$32,414.85
	166	$32,414.85	$2,219.06	$108.05	$2,111.01	$30,303.83
	167	$30,303.83	$2,219.06	$101.01	$2,118.05	$28,185.78
	168	$28,185.78	$2,219.06	$93.95	$2,125.11	$26,060.67
	169	$26,060.67	$2,219.06	$86.87	$2,132.19	$23,928.48
	170	$23,928.48	$2,219.06	$79.76	$2,139.30	$21,789.18
	171	$21,789.18	$2,219.06	$72.63	$2,146.43	$19,642.74
	172	$19,642.74	$2,219.06	$65.48	$2,153.59	$17,489.15
	173	$17,489.15	$2,219.06	$58.30	$2,160.77	$15,328.39
	174	$15,328.39	$2,219.06	$51.09	$2,167.97	$13,160.42
	175	$13,160.42	$2,219.06	$43.87	$2,175.20	$10,985.22
	176	$10,985.22	$2,219.06	$36.62	$2,182.45	$8,802.78
	177	$8,802.78	$2,219.06	$29.34	$2,189.72	$6,613.06
	178	$6,613.06	$2,219.06	$22.04	$2,197.02	$4,416.04
	179	$4,416.04	$2,219.06	$14.72	$2,204.34	$2,211.69
	180	$2,211.69	$2,219.06	$7.37	$2,211.69	$0.00
	Payment in the 10th Year
	Month	Beginning	Monthly	Interest	Principal	Ending
		Balance	Payment			Balance
	109	$141,836.87	$2,219.06	$472.79	$1,746.27	$140,090.59
	110	$140,090.59	$2,219.06	$466.97	$1,752.10	$138,338.50
	111	$138,338.50	$2,219.06	$461.13	$1,757.94	$136,580.56
	112	$136,580.56	$2,219.06	$455.27	$1,763.80	$134,816.77
	113	$134,816.77	$2,219.06	$449.39	$1,769.67	$133,047.09
	114	$133,047.09	$2,219.06	$443.49	$1,775.57	$131,271.52
	115	$131,271.52	$2,219.06	$437.57	$1,781.49	$129,490.03
	116	$129,490.03	$2,219.06	$431.63	$1,787.43	$127,702.60
	117	$127,702.60	$2,219.06	$425.68	$1,793.39	$125,909.21
	118	$125,909.21	$2,219.06	$419.70	$1,799.37	$124,109.84
	119	$124,109.84	$2,219.06	$413.70	$1,805.36	$122,304.48
	120	$122,304.48	$2,219.06	$407.68	$1,811.38	$120,493.10
	TOTAL		$26,628.77	$5,284.99	$21,343.77
	Total dollar amount of interest paid	$5,284.99