Question

A $130,000 mortgage amortized by monthly payments over 20 years is renewable after five years (a) If interest is 5.22% compounded annually, what is the size of each monthly payment? (b) Find the total interest paid during the first year. (c) Compute the interest included in the 26th payment. (d) If the mortgage is renewed after five years at 4.10% compounded annually, what is the size of the monthly payment for the renewal period? (0) Construct a partial amortization schedule showing details of the first three payments for each of the two forms (a) The size of each monthly payment is (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (b) The total interest paid is SU (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (c) The interest included in the 26th payment is $U (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (d) The renewed monthly payments are su (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (e) Complete the partial amortization schedule. (Round to the nearest cent as needed.) Enter your answer in each of the answer hores

Answer 1

Loan = PV	$130,000
period = 12 x 20 years	240
Rate = 5.22%/12	0.44%
a) Monthly Payment	$873.82
b) Total interest Paid	$6,696.19
Period	Payments	Interest	Reduction in balance	Ending balance
1	$873.82	$565.50	$308.32	$129,691.68
2	$873.82	$564.16	$309.66	$129,382.02
3	$873.82	$562.81	$311.01	$129,071.01
4	$873.82	$561.46	$312.36	$128,758.65
5	$873.82	$560.10	$313.72	$128,444.93
6	$873.82	$558.74	$315.08	$128,129.84
7	$873.82	$557.36	$316.46	$127,813.39
8	$873.82	$555.99	$317.83	$127,495.56
9	$873.82	$554.61	$319.21	$127,176.34
10	$873.82	$553.22	$320.60	$126,855.74
11	$873.82	$551.82	$322.00	$126,533.74
12	$873.82	$550.42	$323.40	$126,210.34
		$6,696.19
c)
Interst on 26th Payment	$530.16
d)
Loan = PV	$108,914
period = 12 x 15 years	180
Rate = 4.10%/12	0.34%
Monthly Payment	$811.09
e)
Period	Payments	Interest	Reduction in balance	Ending balance
1	$811.09	$372.12	$438.97	$108,475.26
2	$811.09	$370.62	$440.47	$108,034.79
3	$811.09	$369.12	$441.98	$107,592.81

2 Loan = PV 3 period = 12 x 20 years 4 Rate = 5.22%/12 5 a) Monthly Payment 6 b) Total interest Paid 130000 =20*12 =5.22%/12 =PMT(B4,B3,-B2) =C20 Ending balance =B2-D8 7 Period Reduction in balance =B8-C8 Payments Interest =B5 =B2*B4 =E8*$B$4 =B9-C9 =B8 =E8-D9 10 3 11 |4 12 5 =E9*$B$4 =B9 =B10-C10 =E9-D10 =E10*$B$4 =E11*$B$4 =B11-C11 =E10-D11 =B10 =B11 =B12-C12 =E11-D12 13 6 =E12*$B$4 =B12 =B13-C13 =E12-D13 14 7 =E13*$B$4 =E14*$B$4 =E15*$B$4 =E16*$B$4 =E17*$B$4 =B13 =B14-C14 =E13-D14 15 8 =B14 =B15-C15 =E14-D15 16 9 =B15 =B16-C16 =E15-D16 17 10 =B16 =B17-C17 =E16-D17 18 11 =B17 =B18-C18 =E17-D18 19 12 =E18*$B$4 =SUM(C8:C19) =B19-C19 =B18 =E18-D19 20 21 c) 22 Interst on 26th Payment 23 d) 24 Loan = P -IPM (B4,26, B3,-в2) =PV(B4,B3-60,-B5) 25 period = 12 x 15 years 26 Rate = 4.10%/12 27 Monthly Payment 28 e) =15*12 =4.1%/12 =PMT(B26,B25,-B24) | 29 Period 30 1 Ending balance Payments Interest Reduction in balance =B24 B26 =E30 B26 =B30-C30 =B27 =B24-D30 31 2 =B31-C31 =B30 =E30-D31 32 3 =B32-C32 %3в31 =E31*B26 =E31-D32