Question

In: Finance

Judy recently purchased her first home for $220,000. She made a down payment of $20,000, and...

Judy recently purchased her first home for $220,000. She made a down payment of $20,000, and financed the balance over 15 years, at 6% interest. How much is her principal and interest payment each month?

Solutions

Expert Solution

The interest will be charged on the amount of $200000 (i.e. Purchase price - Down payment). So, Financed amount will be:

Financed amount = $220000 - $20000 = $200000

Interest rate = 6% or 0.06 per year

Monthly interest rate = 6% / 12 = 0.5% or 0.005 per month

No. of EMIs = 15 * 12 months = 180 months

For calculating the amount of each EMI, we will use the following formula,

A = P * (r * (1 + r)n / (1 + r)n - 1),

where, A is the amount of EMI, P is the financed amount, r is the rate of interest per period and n is the no. of periods. Putting the values in the above equation, we get,

A = $200000 * (0.005 * (1 + 0.005)180 / (1 + 0.005)180 - 1)

A = $200000 * (0.005 * (1.005)180 / (1.005)180 - 1)

A = $200000 * (0.005 * 2.4540 / 2.4540 -1)

A = $200000 * (0.01227 / 1.454)

A = $200000 * 0.008438

A= $1687.71

So, every month, EMI will be of amount $1687.71 will be paid for 180 months.

And interest will be charged at the rate of 0.5% on the outstanding balance at the end of each month.

For example, interest for:

First month is : $200000 * 0.005 = $1000

Second month is : $199312.29 * 0.005 = $996.56

The required amortization table with interest and principal amount is given below:

Period EMI Interest Principal Balance
0 Rs. 200000.00
1 Rs. 1687.71 Rs. 1000.00 Rs. 687.71 Rs. 199312.29
2 Rs. 1687.71 Rs. 996.56 Rs. 691.15 Rs. 198621.13
3 Rs. 1687.71 Rs. 993.11 Rs. 694.61 Rs. 197926.53
4 Rs. 1687.71 Rs. 989.63 Rs. 698.08 Rs. 197228.45
5 Rs. 1687.71 Rs. 986.14 Rs. 701.57 Rs. 196526.87
6 Rs. 1687.71 Rs. 982.63 Rs. 705.08 Rs. 195821.79
7 Rs. 1687.71 Rs. 979.11 Rs. 708.60 Rs. 195113.19
8 Rs. 1687.71 Rs. 975.57 Rs. 712.15 Rs. 194401.04
9 Rs. 1687.71 Rs. 972.01 Rs. 715.71 Rs. 193685.33
10 Rs. 1687.71 Rs. 968.43 Rs. 719.29 Rs. 192966.05
11 Rs. 1687.71 Rs. 964.83 Rs. 722.88 Rs. 192243.16
12 Rs. 1687.71 Rs. 961.22 Rs. 726.50 Rs. 191516.67
13 Rs. 1687.71 Rs. 957.58 Rs. 730.13 Rs. 190786.53
14 Rs. 1687.71 Rs. 953.93 Rs. 733.78 Rs. 190052.75
15 Rs. 1687.71 Rs. 950.26 Rs. 737.45 Rs. 189315.30
16 Rs. 1687.71 Rs. 946.58 Rs. 741.14 Rs. 188574.17
17 Rs. 1687.71 Rs. 942.87 Rs. 744.84 Rs. 187829.32
18 Rs. 1687.71 Rs. 939.15 Rs. 748.57 Rs. 187080.76
19 Rs. 1687.71 Rs. 935.40 Rs. 752.31 Rs. 186328.45
20 Rs. 1687.71 Rs. 931.64 Rs. 756.07 Rs. 185572.38
21 Rs. 1687.71 Rs. 927.86 Rs. 759.85 Rs. 184812.52
22 Rs. 1687.71 Rs. 924.06 Rs. 763.65 Rs. 184048.87
23 Rs. 1687.71 Rs. 920.24 Rs. 767.47 Rs. 183281.40
24 Rs. 1687.71 Rs. 916.41 Rs. 771.31 Rs. 182510.10
25 Rs. 1687.71 Rs. 912.55 Rs. 775.16 Rs. 181734.93
26 Rs. 1687.71 Rs. 908.67 Rs. 779.04 Rs. 180955.89
27 Rs. 1687.71 Rs. 904.78 Rs. 782.93 Rs. 180172.96
28 Rs. 1687.71 Rs. 900.86 Rs. 786.85 Rs. 179386.11
29 Rs. 1687.71 Rs. 896.93 Rs. 790.78 Rs. 178595.33
30 Rs. 1687.71 Rs. 892.98 Rs. 794.74 Rs. 177800.59
31 Rs. 1687.71 Rs. 889.00 Rs. 798.71 Rs. 177001.88
32 Rs. 1687.71 Rs. 885.01 Rs. 802.70 Rs. 176199.18
33 Rs. 1687.71 Rs. 881.00 Rs. 806.72 Rs. 175392.46
34 Rs. 1687.71 Rs. 876.96 Rs. 810.75 Rs. 174581.71
35 Rs. 1687.71 Rs. 872.91 Rs. 814.81 Rs. 173766.90
36 Rs. 1687.71 Rs. 868.83 Rs. 818.88 Rs. 172948.02
37 Rs. 1687.71 Rs. 864.74 Rs. 822.97 Rs. 172125.05
38 Rs. 1687.71 Rs. 860.63 Rs. 827.09 Rs. 171297.96
39 Rs. 1687.71 Rs. 856.49 Rs. 831.22 Rs. 170466.74
40 Rs. 1687.71 Rs. 852.33 Rs. 835.38 Rs. 169631.36
41 Rs. 1687.71 Rs. 848.16 Rs. 839.56 Rs. 168791.80
42 Rs. 1687.71 Rs. 843.96 Rs. 843.75 Rs. 167948.05
43 Rs. 1687.71 Rs. 839.74 Rs. 847.97 Rs. 167100.07
44 Rs. 1687.71 Rs. 835.50 Rs. 852.21 Rs. 166247.86
45 Rs. 1687.71 Rs. 831.24 Rs. 856.47 Rs. 165391.39
46 Rs. 1687.71 Rs. 826.96 Rs. 860.76 Rs. 164530.63
47 Rs. 1687.71 Rs. 822.65 Rs. 865.06 Rs. 163665.57
48 Rs. 1687.71 Rs. 818.33 Rs. 869.39 Rs. 162796.18
49 Rs. 1687.71 Rs. 813.98 Rs. 873.73 Rs. 161922.45
50 Rs. 1687.71 Rs. 809.61 Rs. 878.10 Rs. 161044.35
51 Rs. 1687.71 Rs. 805.22 Rs. 882.49 Rs. 160161.86
52 Rs. 1687.71 Rs. 800.81 Rs. 886.90 Rs. 159274.95
53 Rs. 1687.71 Rs. 796.37 Rs. 891.34 Rs. 158383.61
54 Rs. 1687.71 Rs. 791.92 Rs. 895.80 Rs. 157487.82
55 Rs. 1687.71 Rs. 787.44 Rs. 900.27 Rs. 156587.54
56 Rs. 1687.71 Rs. 782.94 Rs. 904.78 Rs. 155682.77
57 Rs. 1687.71 Rs. 778.41 Rs. 909.30 Rs. 154773.47
58 Rs. 1687.71 Rs. 773.87 Rs. 913.85 Rs. 153859.62
59 Rs. 1687.71 Rs. 769.30 Rs. 918.42 Rs. 152941.20
60 Rs. 1687.71 Rs. 764.71 Rs. 923.01 Rs. 152018.20
61 Rs. 1687.71 Rs. 760.09 Rs. 927.62 Rs. 151090.57
62 Rs. 1687.71 Rs. 755.45 Rs. 932.26 Rs. 150158.31
63 Rs. 1687.71 Rs. 750.79 Rs. 936.92 Rs. 149221.39
64 Rs. 1687.71 Rs. 746.11 Rs. 941.61 Rs. 148279.78
65 Rs. 1687.71 Rs. 741.40 Rs. 946.31 Rs. 147333.47
66 Rs. 1687.71 Rs. 736.67 Rs. 951.05 Rs. 146382.42
67 Rs. 1687.71 Rs. 731.91 Rs. 955.80 Rs. 145426.62
68 Rs. 1687.71 Rs. 727.13 Rs. 960.58 Rs. 144466.04
69 Rs. 1687.71 Rs. 722.33 Rs. 965.38 Rs. 143500.66
70 Rs. 1687.71 Rs. 717.50 Rs. 970.21 Rs. 142530.45
71 Rs. 1687.71 Rs. 712.65 Rs. 975.06 Rs. 141555.39
72 Rs. 1687.71 Rs. 707.78 Rs. 979.94 Rs. 140575.45
73 Rs. 1687.71 Rs. 702.88 Rs. 984.84 Rs. 139590.61
74 Rs. 1687.71 Rs. 697.95 Rs. 989.76 Rs. 138600.85
75 Rs. 1687.71 Rs. 693.00 Rs. 994.71 Rs. 137606.14
76 Rs. 1687.71 Rs. 688.03 Rs. 999.68 Rs. 136606.46
77 Rs. 1687.71 Rs. 683.03 Rs. 1004.68 Rs. 135601.78
78 Rs. 1687.71 Rs. 678.01 Rs. 1009.70 Rs. 134592.07
79 Rs. 1687.71 Rs. 672.96 Rs. 1014.75 Rs. 133577.32
80 Rs. 1687.71 Rs. 667.89 Rs. 1019.83 Rs. 132557.49
81 Rs. 1687.71 Rs. 662.79 Rs. 1024.93 Rs. 131532.57
82 Rs. 1687.71 Rs. 657.66 Rs. 1030.05 Rs. 130502.52
83 Rs. 1687.71 Rs. 652.51 Rs. 1035.20 Rs. 129467.32
84 Rs. 1687.71 Rs. 647.34 Rs. 1040.38 Rs. 128426.94
85 Rs. 1687.71 Rs. 642.13 Rs. 1045.58 Rs. 127381.36
86 Rs. 1687.71 Rs. 636.91 Rs. 1050.81 Rs. 126330.55
87 Rs. 1687.71 Rs. 631.65 Rs. 1056.06 Rs. 125274.49
88 Rs. 1687.71 Rs. 626.37 Rs. 1061.34 Rs. 124213.15
89 Rs. 1687.71 Rs. 621.07 Rs. 1066.65 Rs. 123146.50
90 Rs. 1687.71 Rs. 615.73 Rs. 1071.98 Rs. 122074.52
91 Rs. 1687.71 Rs. 610.37 Rs. 1077.34 Rs. 120997.18
92 Rs. 1687.71 Rs. 604.99 Rs. 1082.73 Rs. 119914.45
93 Rs. 1687.71 Rs. 599.57 Rs. 1088.14 Rs. 118826.31
94 Rs. 1687.71 Rs. 594.13 Rs. 1093.58 Rs. 117732.73
95 Rs. 1687.71 Rs. 588.66 Rs. 1099.05 Rs. 116633.68
96 Rs. 1687.71 Rs. 583.17 Rs. 1104.55 Rs. 115529.13
97 Rs. 1687.71 Rs. 577.65 Rs. 1110.07 Rs. 114419.07
98 Rs. 1687.71 Rs. 572.10 Rs. 1115.62 Rs. 113303.45
99 Rs. 1687.71 Rs. 566.52 Rs. 1121.20 Rs. 112182.25
100 Rs. 1687.71 Rs. 560.91 Rs. 1126.80 Rs. 111055.45
101 Rs. 1687.71 Rs. 555.28 Rs. 1132.44 Rs. 109923.01
102 Rs. 1687.71 Rs. 549.62 Rs. 1138.10 Rs. 108784.91
103 Rs. 1687.71 Rs. 543.92 Rs. 1143.79 Rs. 107641.13
104 Rs. 1687.71 Rs. 538.21 Rs. 1149.51 Rs. 106491.62
105 Rs. 1687.71 Rs. 532.46 Rs. 1155.26 Rs. 105336.36
106 Rs. 1687.71 Rs. 526.68 Rs. 1161.03 Rs. 104175.33
107 Rs. 1687.71 Rs. 520.88 Rs. 1166.84 Rs. 103008.49
108 Rs. 1687.71 Rs. 515.04 Rs. 1172.67 Rs. 101835.82
109 Rs. 1687.71 Rs. 509.18 Rs. 1178.53 Rs. 100657.29
110 Rs. 1687.71 Rs. 503.29 Rs. 1184.43 Rs. 99472.86
111 Rs. 1687.71 Rs. 497.36 Rs. 1190.35 Rs. 98282.51
112 Rs. 1687.71 Rs. 491.41 Rs. 1196.30 Rs. 97086.21
113 Rs. 1687.71 Rs. 485.43 Rs. 1202.28 Rs. 95883.93
114 Rs. 1687.71 Rs. 479.42 Rs. 1208.29 Rs. 94675.63
115 Rs. 1687.71 Rs. 473.38 Rs. 1214.34 Rs. 93461.30
116 Rs. 1687.71 Rs. 467.31 Rs. 1220.41 Rs. 92240.89
117 Rs. 1687.71 Rs. 461.20 Rs. 1226.51 Rs. 91014.38
118 Rs. 1687.71 Rs. 455.07 Rs. 1232.64 Rs. 89781.74
119 Rs. 1687.71 Rs. 448.91 Rs. 1238.80 Rs. 88542.93
120 Rs. 1687.71 Rs. 442.71 Rs. 1245.00 Rs. 87297.94
121 Rs. 1687.71 Rs. 436.49 Rs. 1251.22 Rs. 86046.71
122 Rs. 1687.71 Rs. 430.23 Rs. 1257.48 Rs. 84789.23
123 Rs. 1687.71 Rs. 423.95 Rs. 1263.77 Rs. 83525.46
124 Rs. 1687.71 Rs. 417.63 Rs. 1270.09 Rs. 82255.38
125 Rs. 1687.71 Rs. 411.28 Rs. 1276.44 Rs. 80978.94
126 Rs. 1687.71 Rs. 404.89 Rs. 1282.82 Rs. 79696.12
127 Rs. 1687.71 Rs. 398.48 Rs. 1289.23 Rs. 78406.89
128 Rs. 1687.71 Rs. 392.03 Rs. 1295.68 Rs. 77111.21
129 Rs. 1687.71 Rs. 385.56 Rs. 1302.16 Rs. 75809.05
130 Rs. 1687.71 Rs. 379.05 Rs. 1308.67 Rs. 74500.38
131 Rs. 1687.71 Rs. 372.50 Rs. 1315.21 Rs. 73185.17
132 Rs. 1687.71 Rs. 365.93 Rs. 1321.79 Rs. 71863.38
133 Rs. 1687.71 Rs. 359.32 Rs. 1328.40 Rs. 70534.99
134 Rs. 1687.71 Rs. 352.67 Rs. 1335.04 Rs. 69199.95
135 Rs. 1687.71 Rs. 346.00 Rs. 1341.71 Rs. 67858.23
136 Rs. 1687.71 Rs. 339.29 Rs. 1348.42 Rs. 66509.81
137 Rs. 1687.71 Rs. 332.55 Rs. 1355.16 Rs. 65154.65
138 Rs. 1687.71 Rs. 325.77 Rs. 1361.94 Rs. 63792.71
139 Rs. 1687.71 Rs. 318.96 Rs. 1368.75 Rs. 62423.96
140 Rs. 1687.71 Rs. 312.12 Rs. 1375.59 Rs. 61048.36
141 Rs. 1687.71 Rs. 305.24 Rs. 1382.47 Rs. 59665.89
142 Rs. 1687.71 Rs. 298.33 Rs. 1389.38 Rs. 58276.51
143 Rs. 1687.71 Rs. 291.38 Rs. 1396.33 Rs. 56880.18
144 Rs. 1687.71 Rs. 284.40 Rs. 1403.31 Rs. 55476.86
145 Rs. 1687.71 Rs. 277.38 Rs. 1410.33 Rs. 54066.53
146 Rs. 1687.71 Rs. 270.33 Rs. 1417.38 Rs. 52649.15
147 Rs. 1687.71 Rs. 263.25 Rs. 1424.47 Rs. 51224.68
148 Rs. 1687.71 Rs. 256.12 Rs. 1431.59 Rs. 49793.09
149 Rs. 1687.71 Rs. 248.97 Rs. 1438.75 Rs. 48354.35
150 Rs. 1687.71 Rs. 241.77 Rs. 1445.94 Rs. 46908.40
151 Rs. 1687.71 Rs. 234.54 Rs. 1453.17 Rs. 45455.23
152 Rs. 1687.71 Rs. 227.28 Rs. 1460.44 Rs. 43994.80
153 Rs. 1687.71 Rs. 219.97 Rs. 1467.74 Rs. 42527.06
154 Rs. 1687.71 Rs. 212.64 Rs. 1475.08 Rs. 41051.98
155 Rs. 1687.71 Rs. 205.26 Rs. 1482.45 Rs. 39569.52
156 Rs. 1687.71 Rs. 197.85 Rs. 1489.87 Rs. 38079.66
157 Rs. 1687.71 Rs. 190.40 Rs. 1497.32 Rs. 36582.34
158 Rs. 1687.71 Rs. 182.91 Rs. 1504.80 Rs. 35077.54
159 Rs. 1687.71 Rs. 175.39 Rs. 1512.33 Rs. 33565.21
160 Rs. 1687.71 Rs. 167.83 Rs. 1519.89 Rs. 32045.33
161 Rs. 1687.71 Rs. 160.23 Rs. 1527.49 Rs. 30517.84
162 Rs. 1687.71 Rs. 152.59 Rs. 1535.12 Rs. 28982.72
163 Rs. 1687.71 Rs. 144.91 Rs. 1542.80 Rs. 27439.92
164 Rs. 1687.71 Rs. 137.20 Rs. 1550.51 Rs. 25889.40
165 Rs. 1687.71 Rs. 129.45 Rs. 1558.27 Rs. 24331.13
166 Rs. 1687.71 Rs. 121.66 Rs. 1566.06 Rs. 22765.08
167 Rs. 1687.71 Rs. 113.83 Rs. 1573.89 Rs. 21191.19
168 Rs. 1687.71 Rs. 105.96 Rs. 1581.76 Rs. 19609.43
169 Rs. 1687.71 Rs. 98.05 Rs. 1589.67 Rs. 18019.76
170 Rs. 1687.71 Rs. 90.10 Rs. 1597.61 Rs. 16422.15
171 Rs. 1687.71 Rs. 82.11 Rs. 1605.60 Rs. 14816.55
172 Rs. 1687.71 Rs. 74.08 Rs. 1613.63 Rs. 13202.92
173 Rs. 1687.71 Rs. 66.01 Rs. 1621.70 Rs. 11581.22
174 Rs. 1687.71 Rs. 57.91 Rs. 1629.81 Rs. 9951.41
175 Rs. 1687.71 Rs. 49.76 Rs. 1637.96 Rs. 8313.45
176 Rs. 1687.71 Rs. 41.57 Rs. 1646.15 Rs. 6667.31
177 Rs. 1687.71 Rs. 33.34 Rs. 1654.38 Rs. 5012.93
178 Rs. 1687.71 Rs. 25.06 Rs. 1662.65 Rs. 3350.28
179 Rs. 1687.71 Rs. 16.75 Rs. 1670.96 Rs. 1679.32
180 Rs. 1687.71 Rs. 8.40 Rs. 1679.32 Rs. .00

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