If I get a mortgage with a loan of $25,000, a fixed APR of 6%, life time loan of
ID: 2762461 • Letter: I
Question
If I get a mortgage with a loan of $25,000, a fixed APR of 6%, life time loan of 24 months, and give a down payment of $2,000. What will be the corresponding payment schedule report. Include the month number, payment, portion of payment used to repay interest, and portion of payment used to reduce the principal. Calculate monthly payment value using the compound interest loan mode. If I get a mortgage with a loan of $25,000, a fixed APR of 6%, life time loan of 24 months, and give a down payment of $2,000. What will be the corresponding payment schedule report. Include the month number, payment, portion of payment used to repay interest, and portion of payment used to reduce the principal. Calculate monthly payment value using the compound interest loan mode. If I get a mortgage with a loan of $25,000, a fixed APR of 6%, life time loan of 24 months, and give a down payment of $2,000. What will be the corresponding payment schedule report. Include the month number, payment, portion of payment used to repay interest, and portion of payment used to reduce the principal. Calculate monthly payment value using the compound interest loan mode.Explanation / Answer
The monthly payment can be calculated using PMT function in Microsoft Excel. It is shown as below:
=PMT(rate, nper, present value)
In the given question, rate is 6% p.a. and to get it on monthly basis, we have to divide the rate by 12. The principal is 25000 and nper is 24 months.
=PMT(6%/12,24,25000)
= 1108.02
The payment schedule will be as follows:
Month No.
EMI
Interest Portion
Principal Portion
1
$1,108.02
$125.00
$983.02
2
$1,108.02
$120.08
$987.93
3
$1,108.02
$115.15
$992.87
4
$1,108.02
$110.18
$997.83
5
$1,108.02
$105.19
$1,002.82
6
$1,108.02
$100.18
$1,007.84
7
$1,108.02
$95.14
$1,012.88
8
$1,108.02
$90.07
$1,017.94
9
$1,108.02
$84.98
$1,023.03
10
$1,108.02
$79.87
$1,028.15
11
$1,108.02
$74.73
$1,033.29
12
$1,108.02
$69.56
$1,038.45
13
$1,108.02
$64.37
$1,043.65
14
$1,108.02
$59.15
$1,048.86
15
$1,108.02
$53.91
$1,054.11
16
$1,108.02
$48.64
$1,059.38
17
$1,108.02
$43.34
$1,064.68
18
$1,108.02
$38.02
$1,070.00
19
$1,108.02
$32.67
$1,075.35
20
$1,108.02
$27.29
$1,080.73
21
$1,108.02
$21.89
$1,086.13
22
$1,108.02
$16.46
$1,091.56
23
$1,108.02
$11.00
$1,097.02
24
$1,108.02
$5.51
$1,102.50
Month No.
EMI
Interest Portion
Principal Portion
1
$1,108.02
$125.00
$983.02
2
$1,108.02
$120.08
$987.93
3
$1,108.02
$115.15
$992.87
4
$1,108.02
$110.18
$997.83
5
$1,108.02
$105.19
$1,002.82
6
$1,108.02
$100.18
$1,007.84
7
$1,108.02
$95.14
$1,012.88
8
$1,108.02
$90.07
$1,017.94
9
$1,108.02
$84.98
$1,023.03
10
$1,108.02
$79.87
$1,028.15
11
$1,108.02
$74.73
$1,033.29
12
$1,108.02
$69.56
$1,038.45
13
$1,108.02
$64.37
$1,043.65
14
$1,108.02
$59.15
$1,048.86
15
$1,108.02
$53.91
$1,054.11
16
$1,108.02
$48.64
$1,059.38
17
$1,108.02
$43.34
$1,064.68
18
$1,108.02
$38.02
$1,070.00
19
$1,108.02
$32.67
$1,075.35
20
$1,108.02
$27.29
$1,080.73
21
$1,108.02
$21.89
$1,086.13
22
$1,108.02
$16.46
$1,091.56
23
$1,108.02
$11.00
$1,097.02
24
$1,108.02
$5.51
$1,102.50
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