What is the amortization schedule for a mortgage of $1,600,000 in with 1). an initial ten...

What is the amortization schedule for a mortgage of $1,600,000 in with 1). an initial ten year fixed rate of 6.5%; twenty year amortization (monthly); ballooning at the end of the tenth year; and 2) Second ten year rate "capped" at 7.5%; monthly amortization over the remaining ten years on the balance rolled-over from #1.

Expert Solution

1)
Pv	Amount of mortgage	$1,600,000
Nper	Number of months of amortization	240	(20*12)
Rate	Monthly interest rate=(6.5/12)%	0.005416667
PMT	Monthly payment	$11,929.17	(Using PMT function of excelwith Rate=0.00541667,Nper=240, Pv=-1600000)
	Number of months of payment	120	(10*12)
A	Present Value of monthly payments	$1,050,584	(Using PV function of excelwith Rate=0.00541667,Nper=120, Pmt=-11929.17)
P=Pv-A	Present value of Loan balance	$549,416
FV	Baloon payment at the end of 10 year	$1,050,584.12	(Using FV function of excelwith Rate=0.00541667,Nper=120, Pv=-549416)

2)	SECOND TEN YEAR AT 7.5% Monthly Amortization

Pv	Loan amount at beging of the term	$1,050,584
Rate	Monthly interest rate=(7.5/12)%	0.00625
Nper	Number of months of amortization	120	(10*12)
PMT	Monthly payment	$12,470.62	(Using PMT function of excelwith Rate=0.00625,Nper=120, Pv=-1050584)





	AMORTIZATION SCHEDULE 1
		A	B	C=A*0.005416667	D=B-C	E=A-D
	Month	Beginning balance	Total Payment	Interest	Principal	Ending balance
	1	$1,600,000	$11,929.17	$8,666.67	$3,262.50	$1,596,737
	2	$1,596,737	$11,929.17	$8,649.00	$3,280.17	$1,593,457
	3	$1,593,457	$11,929.17	$8,631.23	$3,297.94	$1,590,159
	4	$1,590,159	$11,929.17	$8,613.36	$3,315.81	$1,586,844
	5	$1,586,844	$11,929.17	$8,595.40	$3,333.77	$1,583,510
	6	$1,583,510	$11,929.17	$8,577.35	$3,351.82	$1,580,158

jeff jeffy answered 2 years ago

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