In Year 2011, you decide to get a loan of $350,000 at annual interest rate of 3.

Question

In Year 2011, you decide to get a loan of $350,000 at annual interest rate of 3.545% and to pay back monthly for 15 years.

Mortgage payed monthly therefore i = 0.03545/12

Assume the first payment is to start on 9/15/2011. The interest amount in the June 15, 2017, payment is closest to:

[A] $711
[B] $706
[C] $701
[D] $695
[E] $1,800 Select the best answer.

(I figured out that June 15, 2017 is the 69th month, I tried to calculate how much of the principal was paid off after the 68th payment, subtracted it from $350,000 and then multiplied that by the interest but I got $575 which doesn't seem close to any of the answers. please help)

Explanation / Answer

I have the similar idea with you. My results: Cash flow monthly: P=$2509.830508 At time May 15,2017, the value of 69-month payments is: $191778.3938; the value of $350,000 is: $429005.681. Hence the interest at June 15,2017(one month later) should be ($429005.681-$191778.3938)*0.03545/12=$700.8089444. It's closest to $701, I think [C] can be chosen.

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