You take out a 15-year mortgage for $50,000, at 8% interest, to be paid off mont

Question

You take out a 15-year mortgage for $50,000, at 8% interest, to be paid off monthly. a.) Find the monthly payment. b.) Complete the following amortization table for the company?s first 3 months of payments and last 3 months of payments. c.) Find the interest paid during 9th year of the mortgage. d.) After five years the owner decides to refinance the remaining balance for 10 years at 4.25% compounded monthly. Find the new monthly payment. e.) Find the amount of interest the owner would have paid f.) Find the amount of Interest the owner paid during the first 5 years. g.) Find the amount saved by refinancing. Show all your work b.) Complete the 11owing amortization table for the comp months of payments and last 3 months of payments.

Explanation / Answer

A)

Principle

$50,000.00

Rate of Interest

8.00%

0.67%

Monthly

Tenure

15

180

Month

Monthly Payment

($477.83)

B)

Month

Outstanding Principle

Payment of Principle

Interest Payment

Monthly Payment

1

$50,000.00

($144.49)

($333.33)

($477.83)

2

$49,855.51

($145.46)

($332.37)

($477.83)

3

$49,710.05

($146.43)

($331.40)

($477.83)

178

$1,414.58

($468.40)

($9.43)

($477.83)

179

$946.18

($471.52)

($6.31)

($477.83)

180

$474.66

($474.66)

($3.16)

($477.83)

C)

Month

Outstanding Principle

Payment of Principle

Interest Payment

Monthly Payment

97

$30,656.97

($273.45)

($204.38)

($477.83)

98

$30,383.52

($275.27)

($202.56)

($477.83)

99

$30,108.25

($277.10)

($200.72)

($477.83)

100

$29,831.15

($278.95)

($198.87)

($477.83)

101

$29,552.19

($280.81)

($197.01)

($477.83)

102

$29,271.38

($282.68)

($195.14)

($477.83)

103

$28,988.70

($284.57)

($193.26)

($477.83)

104

$28,704.13

($286.47)

($191.36)

($477.83)

105

$28,417.67

($288.37)

($189.45)

($477.83)

106

$28,129.29

($290.30)

($187.53)

($477.83)

107

$27,838.99

($292.23)

($185.59)

($477.83)

108

$27,546.76

($294.18)

($183.65)

($477.83)

Total Interest paid in 9th Year

($2,329.53)

D)

Principle after 5 year

$39,383.13

Rate of Interest

4.25%

0.35%

Monthly

Rest Tenure

10

120

Month

Monthly Payment

($403.43)

E)

In First Five Year

($18,052.69)

in Next 10 Year

($9,028.60)

Total

($27,081.29)

F)

In First Five Year

($18,052.69)

G)

Total Interest Payable on 8 % Interest rate

($36,008.69)

After Refinancing Interest payable

($27,081.29)

Net Saving

$8,927.40

Principle

$50,000.00

Rate of Interest

8.00%

0.67%

Monthly

Tenure

15

180

Month

Monthly Payment

($477.83)

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