Question

You borrow $800,000 to buy a house worth $1,000,000.

The interest rate is 3.6% pa compounding monthly and the fully amortising loan term is 30 years. A loan repayment schedule is shown below, with some parts missing in bold.

Loan Repayment Schedule
Interest rate of 3.6% pa paid monthly, 30 year term
Time	Total payment	Interest component	Principal component	Liability, just after payment
Month	$/month	$/month	$/month	$
0				800,000.00
1	3,637.16	(a)	(b)	(c)
2	3,637.16	2,396.29	1,240.87	797,521.96
3	3,637.16	2,392.57	1,244.60	796,277.37
4	3,637.16	2,388.83	1,248.33	795,029.04
5	3,637.16	2,385.09	1,252.08	793,776.96
6	3,637.16	2,381.33	1,255.83	792,521.13
7	3,637.16	2,377.56	1,259.60	791,261.53
8	3,637.16	2,373.78	1,263.38	789,998.15
…
356	3,637.16	54.07	3,583.09	14,440.19
357	3,637.16	43.32	3,593.84	10,846.35
358	3,637.16	32.54	3,604.62	7,241.72
359	3,637.16	(d)	(e)	?
360	3,637.16	10.88	3,626.28	0.00

Which of the below statements is NOT correct? All answer options are rounded to 2 decimal places as is the table above.

Select one:

a. The interest component at month 1 is $2,400.

b. The principal component at month 1 is $1,237.16.

c. The amount owing just after the payment at month 1 is $798,762.84.

d.
The interest component at month 359 is $21.69.

e.
The principal component at month 359 is $3,615.44.

Answer 1