In: Finance
First we need to find out the monthly payment:
We are given the following information
Payment | PMT | To be calculated |
Rate of interest | r | 10.00% |
Number of years | n | 15.00 |
Monthly | frequency | 12.00 |
Loan amount | PV | 1000000.00 |
We need to solve the following equation to arrive at the required
PMT:
So the monthly payment is 10746.05
To make the time line we have to make an amortization schedule:
Opening balance = previous year's closing balance
Closing balance = Opening balance+Loan-Principal repayment
PMT is calculated as per the above formula
Interest = 0.1 /12 x opening balance
Principal repayment = PMT - Interest
Below is the timeline of interest and principal
payment: