Question

Ms. Jordan has just taken out a $150,000 mortgage loan at an interest rate of 6 percent. If the

mortgage calls for equal monthly payments for 20 years, what is the amount of each payment?

Also, work out an amortization table

Answer 1

We see that monthly payment=Loan*(rate/12)/(1-1/(1+rate/12)^(12*n))=150000*(6%/12)/(1-1/(1+6%/12)^(12*20))=1074.64658772

For first payment,Loan beginning balance=Loan amount=150000

For other payments, Loan beginning balance=Loan ending balance from previous month

Interest payment=Loan beginning balance*6%/12

Principal Payment=Monthly payment-Interest payment

Loan ending balance=Loan beginning balance-Principal Payment

Payment	Loan beginning balance	Payment	Interest payment	Principal payment	Loan ending balance
1	150000	$1,074.65	$750.00	$324.65	$1,49,675.35
2	$1,49,675.35	$1,074.65	$748.38	$326.27	$1,49,349.08
3	$1,49,349.08	$1,074.65	$746.75	$327.90	$1,49,021.18
4	$1,49,021.18	$1,074.65	$745.11	$329.54	$1,48,691.64
5	$1,48,691.64	$1,074.65	$743.46	$331.19	$1,48,360.45
6	$1,48,360.45	$1,074.65	$741.80	$332.84	$1,48,027.61
7	$1,48,027.61	$1,074.65	$740.14	$334.51	$1,47,693.10
8	$1,47,693.10	$1,074.65	$738.47	$336.18	$1,47,356.92
9	$1,47,356.92	$1,074.65	$736.78	$337.86	$1,47,019.06
10	$1,47,019.06	$1,074.65	$735.10	$339.55	$1,46,679.51
11	$1,46,679.51	$1,074.65	$733.40	$341.25	$1,46,338.26
12	$1,46,338.26	$1,074.65	$731.69	$342.96	$1,45,995.30
13	$1,45,995.30	$1,074.65	$729.98	$344.67	$1,45,650.63
14	$1,45,650.63	$1,074.65	$728.25	$346.39	$1,45,304.24
15	$1,45,304.24	$1,074.65	$726.52	$348.13	$1,44,956.11
16	$1,44,956.11	$1,074.65	$724.78	$349.87	$1,44,606.25
17	$1,44,606.25	$1,074.65	$723.03	$351.62	$1,44,254.63
18	$1,44,254.63	$1,074.65	$721.27	$353.37	$1,43,901.26
19	$1,43,901.26	$1,074.65	$719.51	$355.14	$1,43,546.12
20	$1,43,546.12	$1,074.65	$717.73	$356.92	$1,43,189.20
21	$1,43,189.20	$1,074.65	$715.95	$358.70	$1,42,830.50
22	$1,42,830.50	$1,074.65	$714.15	$360.49	$1,42,470.01
23	$1,42,470.01	$1,074.65	$712.35	$362.30	$1,42,107.71
24	$1,42,107.71	$1,074.65	$710.54	$364.11	$1,41,743.60
25	$1,41,743.60	$1,074.65	$708.72	$365.93	$1,41,377.67
26	$1,41,377.67	$1,074.65	$706.89	$367.76	$1,41,009.92
27	$1,41,009.92	$1,074.65	$705.05	$369.60	$1,40,640.32
28	$1,40,640.32	$1,074.65	$703.20	$371.44	$1,40,268.87
29	$1,40,268.87	$1,074.65	$701.34	$373.30	$1,39,895.57
30	$1,39,895.57	$1,074.65	$699.48	$375.17	$1,39,520.40
31	$1,39,520.40	$1,074.65	$697.60	$377.04	$1,39,143.36
32	$1,39,143.36	$1,074.65	$695.72	$378.93	$1,38,764.43
33	$1,38,764.43	$1,074.65	$693.82	$380.82	$1,38,383.60
34	$1,38,383.60	$1,074.65	$691.92	$382.73	$1,38,000.88
35	$1,38,000.88	$1,074.65	$690.00	$384.64	$1,37,616.23
36	$1,37,616.23	$1,074.65	$688.08	$386.57	$1,37,229.67
37	$1,37,229.67	$1,074.65	$686.15	$388.50	$1,36,841.17
38	$1,36,841.17	$1,074.65	$684.21	$390.44	$1,36,450.73
39	$1,36,450.73	$1,074.65	$682.25	$392.39	$1,36,058.34
40	$1,36,058.34	$1,074.65	$680.29	$394.35	$1,35,663.98
41	$1,35,663.98	$1,074.65	$678.32	$396.33	$1,35,267.65
42	$1,35,267.65	$1,074.65	$676.34	$398.31	$1,34,869.35
43	$1,34,869.35	$1,074.65	$674.35	$400.30	$1,34,469.05
44	$1,34,469.05	$1,074.65	$672.35	$402.30	$1,34,066.74
45	$1,34,066.74	$1,074.65	$670.33	$404.31	$1,33,662.43
46	$1,33,662.43	$1,074.65	$668.31	$406.33	$1,33,256.10
47	$1,33,256.10	$1,074.65	$666.28	$408.37	$1,32,847.73
48	$1,32,847.73	$1,074.65	$664.24	$410.41	$1,32,437.32
49	$1,32,437.32	$1,074.65	$662.19	$412.46	$1,32,024.86
50	$1,32,024.86	$1,074.65	$660.12	$414.52	$1,31,610.34
51	$1,31,610.34	$1,074.65	$658.05	$416.59	$1,31,193.75
52	$1,31,193.75	$1,074.65	$655.97	$418.68	$1,30,775.07
53	$1,30,775.07	$1,074.65	$653.88	$420.77	$1,30,354.30
54	$1,30,354.30	$1,074.65	$651.77	$422.88	$1,29,931.42
55	$1,29,931.42	$1,074.65	$649.66	$424.99	$1,29,506.43
56	$1,29,506.43	$1,074.65	$647.53	$427.11	$1,29,079.32
57	$1,29,079.32	$1,074.65	$645.40	$429.25	$1,28,650.07