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Justin Buzzer makes a 15 percent down-payment on a house valued $100,000 and takes out a...

Justin Buzzer makes a 15 percent down-payment on a house valued $100,000 and takes out a 20-year fixed rate mortgage with quarterly payments. The mortgage rate is 9 percent compounded quarterly with the first payment occurring at t = 1. What is Justin’s quarterly mortgage payment?

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Expert Solution

Loan amount = price*(1-down payment percentage)

=100000*(1-0.15) = 85000

Quarterly rate(M)= yearly rate/12= 2.25% Quarterly payment= 2300.42
Quarter Beginning balance (A) Quarterly payment Interest = M*A Principal paid Ending balance
1 85000.00 2300.42 1912.50 387.92 84612.08
2 84612.08 2300.42 1903.77 396.65 84215.43
3 84215.43 2300.42 1894.85 405.57 83809.86
4 83809.86 2300.42 1885.72 414.70 83395.16
5 83395.16 2300.42 1876.39 424.03 82971.13
6 82971.13 2300.42 1866.85 433.57 82537.56
7 82537.56 2300.42 1857.10 443.32 82094.24
8 82094.24 2300.42 1847.12 453.30 81640.94
9 81640.94 2300.42 1836.92 463.50 81177.44
10 81177.44 2300.42 1826.49 473.93 80703.52
11 80703.52 2300.42 1815.83 484.59 80218.93
12 80218.93 2300.42 1804.93 495.49 79723.43
13 79723.43 2300.42 1793.78 506.64 79216.79
14 79216.79 2300.42 1782.38 518.04 78698.75
15 78698.75 2300.42 1770.72 529.70 78169.05
16 78169.05 2300.42 1758.80 541.62 77627.43
17 77627.43 2300.42 1746.62 553.80 77073.63
18 77073.63 2300.42 1734.16 566.26 76507.37
19 76507.37 2300.42 1721.42 579.00 75928.36
20 75928.36 2300.42 1708.39 592.03 75336.33
21 75336.33 2300.42 1695.07 605.35 74730.98
22 74730.98 2300.42 1681.45 618.97 74112.01
23 74112.01 2300.42 1667.52 632.90 73479.11
24 73479.11 2300.42 1653.28 647.14 72831.97
25 72831.97 2300.42 1638.72 661.70 72170.27
26 72170.27 2300.42 1623.83 676.59 71493.68
27 71493.68 2300.42 1608.61 691.81 70801.87
28 70801.87 2300.42 1593.04 707.38 70094.49
29 70094.49 2300.42 1577.13 723.29 69371.20
30 69371.20 2300.42 1560.85 739.57 68631.63
31 68631.63 2300.42 1544.21 756.21 67875.42
32 67875.42 2300.42 1527.20 773.22 67102.20
33 67102.20 2300.42 1509.80 790.62 66311.58
34 66311.58 2300.42 1492.01 808.41 65503.17
35 65503.17 2300.42 1473.82 826.60 64676.57
36 64676.57 2300.42 1455.22 845.20 63831.38
37 63831.38 2300.42 1436.21 864.21 62967.16
38 62967.16 2300.42 1416.76 883.66 62083.50
39 62083.50 2300.42 1396.88 903.54 61179.96
40 61179.96 2300.42 1376.55 923.87 60256.09
41 60256.09 2300.42 1355.76 944.66 59311.43
42 59311.43 2300.42 1334.51 965.91 58345.52
43 58345.52 2300.42 1312.77 987.65 57357.88
44 57357.88 2300.42 1290.55 1009.87 56348.01
45 56348.01 2300.42 1267.83 1032.59 55315.42
46 55315.42 2300.42 1244.60 1055.82 54259.60
47 54259.60 2300.42 1220.84 1079.58 53180.02
48 53180.02 2300.42 1196.55 1103.87 52076.15
49 52076.15 2300.42 1171.71 1128.71 50947.44
50 50947.44 2300.42 1146.32 1154.10 49793.34
51 49793.34 2300.42 1120.35 1180.07 48613.27
52 48613.27 2300.42 1093.80 1206.62 47406.65
53 47406.65 2300.42 1066.65 1233.77 46172.88
54 46172.88 2300.42 1038.89 1261.53 44911.35
55 44911.35 2300.42 1010.51 1289.91 43621.44
56 43621.44 2300.42 981.48 1318.94 42302.50
57 42302.50 2300.42 951.81 1348.61 40953.89
58 40953.89 2300.42 921.46 1378.96 39574.93
59 39574.93 2300.42 890.44 1409.98 38164.95
60 38164.95 2300.42 858.71 1441.71 36723.24
61 36723.24 2300.42 826.27 1474.15 35249.09
62 35249.09 2300.42 793.10 1507.32 33741.78
63 33741.78 2300.42 759.19 1541.23 32200.55
64 32200.55 2300.42 724.51 1575.91 30624.64
65 30624.64 2300.42 689.05 1611.37 29013.27
66 29013.27 2300.42 652.80 1647.62 27365.65
67 27365.65 2300.42 615.73 1684.69 25680.96
68 25680.96 2300.42 577.82 1722.60 23958.36
69 23958.36 2300.42 539.06 1761.36 22197.00
70 22197.00 2300.42 499.43 1800.99 20396.02
71 20396.02 2300.42 458.91 1841.51 18554.51
72 18554.51 2300.42 417.48 1882.94 16671.57
73 16671.57 2300.42 375.11 1925.31 14746.26
74 14746.26 2300.42 331.79 1968.63 12777.63
75 12777.63 2300.42 287.50 2012.92 10764.70
76 10764.70 2300.42 242.21 2058.21 8706.49
77 8706.49 2300.42 195.90 2104.52 6601.97
78 6601.97 2300.42 148.54 2151.88 4450.09
79 4450.09 2300.42 100.13 2200.29 2249.80
80 2249.80 2300.42 50.62 2249.80 0.00
Where
Interest paid = Beginning balance * Quarterly interest rate
Principal = Quarterly payment – interest paid
Ending balance = beginning balance – principal paid
Beginning balance = previous Quarter ending balance

jeff jeffy answered 1 year ago
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