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6–32. (Calculating the components of an annuity payment) You have just bought a house inom do...

Question:

6–32. (Calculating the components of an annuity payment) You have just bought a house inom do for €270,000 by taking a 20-yea
6–32. (Calculating the components of an annuity payment) You have just bought a house inom do for €270,000 by taking a 20-year mortgage for the same amount at 8 percent per an- num payable in monthly installments. What will your monthly payments be? Use a spreadsheet to calculate your answer. Now calculate the amounts in the 50th monthly payment that goes toward interest and principal, respectively.

Answers

Here's the monthly annuity payment schedule:.

Monthly payment = $ 2,258.39 (rounded off to 2 decimal places)

Total interest paid up to 50 months = $ 85,823.87

Total Principal paid up to 50 months = $ 27,095.50

Description Details Reference
Loan Amount $   270,000.00 B2
Interest Rate 8% B3
Year 20 B4
No. of months per year 12 B5
<month> PMT(B3/B5,B4*B5,B2) IPMT(B3/B5,<month>,B4*B5,B2) PPMT(B3/B5,<month>,B4*B5,B2)
Month Amount at beginning of the month Total Payment Interest amount Principal repaid Balance at end of the month
1 $270,000.00 $2,258.39 $1,800.00 $458.39 $269,541.61
2 $269,541.61 $2,258.39 $1,796.94 $461.44 $269,080.17
3 $269,080.17 $2,258.39 $1,793.87 $464.52 $268,615.65
4 $268,615.65 $2,258.39 $1,790.77 $467.62 $268,148.03
5 $268,148.03 $2,258.39 $1,787.65 $470.73 $267,677.30
6 $267,677.30 $2,258.39 $1,784.52 $473.87 $267,203.43
7 $267,203.43 $2,258.39 $1,781.36 $477.03 $266,726.40
8 $266,726.40 $2,258.39 $1,778.18 $480.21 $266,246.19
9 $266,246.19 $2,258.39 $1,774.97 $483.41 $265,762.78
10 $265,762.78 $2,258.39 $1,771.75 $486.64 $265,276.14
11 $265,276.14 $2,258.39 $1,768.51 $489.88 $264,786.26
12 $264,786.26 $2,258.39 $1,765.24 $493.15 $264,293.11
13 $264,293.11 $2,258.39 $1,761.95 $496.43 $263,796.68
14 $263,796.68 $2,258.39 $1,758.64 $499.74 $263,296.94
15 $263,296.94 $2,258.39 $1,755.31 $503.08 $262,793.86
16 $262,793.86 $2,258.39 $1,751.96 $506.43 $262,287.43
17 $262,287.43 $2,258.39 $1,748.58 $509.81 $261,777.62
18 $261,777.62 $2,258.39 $1,745.18 $513.20 $261,264.42
19 $261,264.42 $2,258.39 $1,741.76 $516.63 $260,747.79
20 $260,747.79 $2,258.39 $1,738.32 $520.07 $260,227.72
21 $260,227.72 $2,258.39 $1,734.85 $523.54 $259,704.18
22 $259,704.18 $2,258.39 $1,731.36 $527.03 $259,177.15
23 $259,177.15 $2,258.39 $1,727.85 $530.54 $258,646.61
24 $258,646.61 $2,258.39 $1,724.31 $534.08 $258,112.53
25 $258,112.53 $2,258.39 $1,720.75 $537.64 $257,574.89
26 $257,574.89 $2,258.39 $1,717.17 $541.22 $257,033.67
27 $257,033.67 $2,258.39 $1,713.56 $544.83 $256,488.84
28 $256,488.84 $2,258.39 $1,709.93 $548.46 $255,940.38
29 $255,940.38 $2,258.39 $1,706.27 $552.12 $255,388.26
30 $255,388.26 $2,258.39 $1,702.59 $555.80 $254,832.46
31 $254,832.46 $2,258.39 $1,698.88 $559.51 $254,272.95
32 $254,272.95 $2,258.39 $1,695.15 $563.24 $253,709.71
33 $253,709.71 $2,258.39 $1,691.40 $566.99 $253,142.72
34 $253,142.72 $2,258.39 $1,687.62 $570.77 $252,571.95
35 $252,571.95 $2,258.39 $1,683.81 $574.58 $251,997.37
36 $251,997.37 $2,258.39 $1,679.98 $578.41 $251,418.96
37 $251,418.96 $2,258.39 $1,676.13 $582.26 $250,836.70
38 $250,836.70 $2,258.39 $1,672.24 $586.14 $250,250.56
39 $250,250.56 $2,258.39 $1,668.34 $590.05 $249,660.51
40 $249,660.51 $2,258.39 $1,664.40 $593.98 $249,066.53
41 $249,066.53 $2,258.39 $1,660.44 $597.94 $248,468.59
42 $248,468.59 $2,258.39 $1,656.46 $601.93 $247,866.66
43 $247,866.66 $2,258.39 $1,652.44 $605.94 $247,260.72
44 $247,260.72 $2,258.39 $1,648.40 $609.98 $246,650.74
45 $246,650.74 $2,258.39 $1,644.34 $614.05 $246,036.69
46 $246,036.69 $2,258.39 $1,640.24 $618.14 $245,418.55
47 $245,418.55 $2,258.39 $1,636.12 $622.26 $244,796.29
48 $244,796.29 $2,258.39 $1,631.98 $626.41 $244,169.88
49 $244,169.88 $2,258.39 $1,627.80 $630.59 $243,539.29
50 $243,539.29 $2,258.39 $1,623.60 $634.79 $242,904.50
Total up to 50 months $85,823.87 $ 27.095.50

Excel formulae to compute interest and principal are given in the top. Use the same by prefix "=-" symbol in excel. the same schedule can be continued till 240 months to see "total value" become "$0" at end of 240 months (i.e.) 20 years.

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