Question

You are buying a new house on a 30-year, 6.2% mortgage loan of $230,000.

A. How much will your monthly payments be?

B. How much will go toward principal in the 55^th month? How much will go toward interest in the 55^th month? What will be the balance after 55 months?

C. How much interest will you pay in total over the 30 years?

D. If you do a 15-year loan instead of a 30-year one, how much will you save in total interest?

Answer 1

A.	Monthly Payment	=-pmt(rate,nper,pv,fv)
		= $ 1,408.68
	Where,
	rate	=	6.2%/12	=	0.005166667
	nper	=	30*12	=	360
	pv			=	$       2,30,000
	fv			=	0
B.	Principal repaid in 55th Payment		$           291.04
	Interest repaid in 55th Payment		$       1,117.63
	Balance after 55th Payment		$ 2,16,025.16
Working:
	Balance after 54th Payment	=pv(rate,nper,pmt,fv)		Where,
		$ 2,16,316.20			rate			=	0.00516667
					nper	=	360-54	=	306
					pmt			=	$ -1,408.68
					fv			=	0
	Month	Beginning Loan	Interest	Payment	Principal Repaid	Ending Loan
		a	b=a*6.2%*1/12	c	d=c-b	e=a-d
	55	$ 2,16,316.20	$ 1,117.63	$ 1,408.68	$           291.04	$ 2,16,025.16
C.	Interest Paid	$ 2,77,124.31
Working:
Total repayment	$       1,408.68	*	360	=	$ 5,07,124.31
Loan amount					$ 2,30,000.00
Interest						$ 2,77,124.31
D.	Saving in Interest	$ 1,53,278.45
Working:
Monthly Payment	=-pmt(rate,nper,pv,fv)
	= $ 1,965.81
Where,
rate	=	6.2%/12	=	0.0051667
nper	=	15*12	=	180
pv			=	$ 2,30,000
fv			=	0
Total repayment	=	$       1,965.81	*	180	=	$ 3,53,845.86
Loan amount					$ 2,30,000.00
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