Question

The bank has extended a fully amortizing $500,000 monthly pay in arrears 15-year mortgage at 4%. What is the cumulative amount of interest and cumulative amount of principal for the periods 13 to 24?

a. $19,511.78; $24,869.50

b. $19,127.54; $25,253.74

c. $18,226.98; $ 26,154.30

d. $18,536.26; $25,845.02

Answer 1

Ans d. $18,536.26; $25,845.02

		P =	Regular Payments
		PV =	Loan Amount
		r =	rate of interest
		n =	no of periods
		P =	r (PV)
			1 - (1 + r )^-n
		P =	(4%/12)*500000
			1 - (1 / (1 + 4%/12)^180))
		P =	1666.666667
			0.450640496
		P =	3698.44
	Beginning Balance	Interest	Principal	Ending Balance
1	5,00,000.00	1,666.67	2,031.77	4,97,968.23
2	4,97,968.23	1,659.89	2,038.55	4,95,929.68
3	4,95,929.68	1,653.10	2,045.34	4,93,884.34
4	4,93,884.34	1,646.28	2052.16	491832.18
5	4,91,832.18	1,639.44	2,059.00	4,89,773.18
6	4,89,773.18	1,632.58	2,065.86	4,87,707.32
7	4,87,707.32	1,625.69	2,072.75	4,85,634.57
8	4,85,634.57	1,618.78	2,079.66	4,83,554.91
9	4,83,554.91	1,611.85	2,086.59	4,81,468.32
10	4,81,468.32	$1,604.89	$2,093.55	$4,79,374.78
11	4,79,374.78	$1,597.92	$2,100.52	$4,77,274.26
12	4,77,274.26	$1,590.91	$2,107.53	$4,75,166.73
Year #1 End
13	4,75,166.73	$1,583.89	$2,114.55	$4,73,052.18
14	4,73,052.18	$1,576.84	$2,121.60	$4,70,930.58
15	4,70,930.58	$1,569.77	$2,128.67	$4,68,801.91
16	4,68,801.91	$1,562.67	$2,135.77	$4,66,666.14
17	4,66,666.14	$1,555.55	$2,142.89	$4,64,523.26
18	4,64,523.26	$1,548.41	$2,150.03	$4,62,373.23
19	4,62,373.23	$1,541.24	$2,157.20	$4,60,216.03
20	4,60,216.03	$1,534.05	$2,164.39	$4,58,051.65
21	4,58,051.65	$1,526.84	$2,171.60	$4,55,880.05
22	4,55,880.05	$1,519.60	$2,178.84	$4,53,701.21
23	4,53,701.21	$1,512.34	$2,186.10	$4,51,515.10
24	4,51,515.10	$1,505.05	$2,193.39	$4,49,321.72
	Total of 13-24	$ 18536.26	$ 25845.02