In: Accounting
A loan of $490,000 is amortized over 30 years with payments at
the end of each month and an interest rate of 8.1%, compounded
monthly.
Use Excel to create an amortization table showing, for each of the
360 payments, the beginning balance, the interest owed, the
principal, the payment amount, and the ending balance.
Answer the following, rounding to the nearest penny.
a) Find the amount of each payment. $
b) Find the total amount of interest paid during the first 15
payments. $
c) Find the total amount of interest paid over the life of the
loan. $
d) Find the total of all payments made over 30 years. $
Suppose that payment number 4 is skipped and the interest owed for
month 4 is added to the balance. Payments then resume as usual for
the remainder of the 30 years.
e) Find the balance owing at the end of month 4. $
f) Find the balance remaining after the 360th payment. $
a)
Principal payment for loan amount 490000 calculated by dividing 360 payment
Monthly principal amount of payment =49000/360 =1361
b)
Interest payment for first 15 payments = 48648
C & d
Total amount payment made over 30 years =1087052
Total interest = 597052
e Balance owing at the end of month 4 = 489197
4th payment skipped that result in to interest payable added to outstanding balance.
f
balance remaining after 360th payment = 4641
Note -