A loan is for $600,000 (mortgage), 30 years monthly, 4% fixed rate interest. What is the...

A loan is for $600,000 (mortgage), 30 years monthly, 4% fixed rate interest. What is the payment, 5-year payoff, 5-year principal paid, and 5-year interest paid?

Solutions

Expert Solution

Step-1:Calculation of monthly payment

Monthly Payment	=	Loan amount	/	Present value of annuity of 1
	=	$ 6,00,000	/	209.47136
	=	$ 2,864.35

Working:

Present value of annuity of 1	=	(1-(1+i)^-n)/i		Where,
	=	(1-(1+0.003333)^-360)/0.003333		i	4%/12	=	0.003333
	=	209.4713584		n	30*12	=	360

Step-2:Calculation of 5-year payoff, 5-year principal paid, and 5-year interest paid

5-year payoff	=	$ 2,864.35	*	360		=	$ 10,31,167.23
5-year principal paid							$ 6,00,000.00

5-year interest paid							$ 4,31,167.23

ekkarill92 answered 7 months ago

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