Question: At one point in time when you took out a mortgage, a paper copy of an amortization table was provided to you detailing how much

At one point in time when you took out a mortgage, a paper copy of an amortization table was provided to you detailing how much of each payment went towards the principal and how much went towards the interest as well as showing the remaining amount owed after each payment was made. Suppose that you want to purchase a home for $240,000 using a down payment as $91,088 and you finance the rest of the purchase by taking out a 15-year mortgage at 4.5% interest compounded monthly. Construct an amortization table for the entire length of the loan making sure to include columns for the payment number, the amount of the payment, the amount of each payment that goes towards the principal, the amount of each payment that goes towards the interest, and the amount still owed on the loan after the particular payment is made (you may want to create other columns in addition to these, but whether or not you do will be dependent on your spreadsheet set-up). A couple of tips/hints that I will offer are that you may want to refer to the last example in the section 11.6 and the last example in the section 6.3 lectures for a little help with getting the equations set up, the amounts that go towards principal and interest will differ from one payment to the next, and after the 180th payment has been made you should owe $0 on the loan.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!