Question

You take out a $450,000 30-year mortgage that has a 3.67% annual interest rate and your annual payments on the loan are $25,000. How much of your payment was allocated to principal in year 5?

How much of your payment was allocated to interest in year 3?

Answer 1

Amortization Schedule:

Year	Opening Bal	Instalment	Interest	Principal Repay	Closing Balance
1	$ 450,000.00	$ 25,000.00	$ 16,515.00	$   8,485.00	$ 441,515.00
2	$ 441,515.00	$ 25,000.00	$ 16,203.60	$   8,796.40	$ 432,718.60
3	$ 432,718.60	$ 25,000.00	$ 15,880.77	$   9,119.23	$ 423,599.37
4	$ 423,599.37	$ 25,000.00	$ 15,546.10	$   9,453.90	$ 414,145.47
5	$ 414,145.47	$ 25,000.00	$ 15,199.14	$   9,800.86	$ 404,344.61

Amount allocated to Principal in Year 5 = $ 404,344.61

Amount allocated to Int In year 3 = $ 15,880.77

Opening Balance = Previous month closing balance
EMI = Instalment calculated
Int = Opening Balance * Int Rate
Principal repay = Instalment - Int
Closing Balance = Opening balance - Principal Repay