Question

On August 1, you borrow $180,000 to buy a house. The mortgage rate is 7.0 percent. The loan is to be repaid in equal monthly payments over 15 years. The first payment is due on September 1. How much of the tenth payment applies to the principle balance? (Assume that each month is equal to 1/12 of a year.)

Group of answer choices

$543.22

$566.24

$589.28

$598.41

$615.32

Answer 1

rate positively ..

	We have to compute first monthly payment and than amortizationn table
	Put in financial calculator -
	FV		0
	PV		-180000
	I	7%/12	0.5833%
	N	15*12	180
	Compute PMT		$1,617.89
	Amortization table
	Period	Beginning balance	Interest	Payment	Principal	ending balance
	0					180000
	1	180000	1050	$1,617.89	$567.89	$179,432.11
	2	179432.1	1046.687	$1,617.89	$571.20	$178,860.91
	3	178860.9	1043.355	$1,617.89	$574.54	$178,286.37
	4	178286.4	1040.004	$1,617.89	$577.89	$177,708.48
	5	177708.5	1036.633	$1,617.89	$581.26	$177,127.22
	6	177127.2	1033.242	$1,617.89	$584.65	$176,542.58
	7	176542.6	1029.832	$1,617.89	$588.06	$175,954.52
	8	175954.5	1026.401	$1,617.89	$591.49	$175,363.03
	9	175363	1022.951	$1,617.89	$594.94	$174,768.09
	10	174768.1	1019.481	$1,617.89	$598.41	$174,169.68
	therefore, answer =			$598.41