Question

A homeowner can obtain a $250,000, 30-year fixed-rate mortgage at a rate of 3.25 percent with monthly payments. How much principal and interest will she pay in the 27th monthly payment?

Answer 1

		Amount
Principal Paid		$ 440.87
Interest Paid		$ 647.15

Step-1:Calculation of monthly payment
Monthly Payment	=-pmt(rate,nper,pv,fv)
	= $ 1,088.02
Where,
rate	=	3.25%/12	=	0.002708333
nper	=	30*12	=	360
pv			=	$       2,50,000
fv			=	0
Step-2:Loan value at the end 26th months
Loan Value	=pv(rate,nper,pmt,fv)
	= $ 2,38,946.09
Where,
rate	=	3.25%/12	=	0.002708333
nper	=	360-26	=	334
pmt			=	$           -1,088
fv			=	0
Step-3:Loan value at the end 27th months
Loan Value	=pv(rate,nper,pmt,fv)
	= $ 2,38,505.22
Where,
rate	=	3.25%/12	=	0.002708333
nper	=	360-27	=	333
pmt			=	$           -1,088
fv			=	0
Step-4:Principal and interest paid in 27th payment
Total Monthly Payment	$       1,088.02
Principal repaid		$           440.87
Interest Repaid		$           647.15
Working:
Principal repaid	=	Loan Value at the end of 26th month	-	Loan Value at the end of 27th month
	=	$ 2,38,946.09	-	$ 2,38,505.22
	=	$           440.87