Consider a home mortgage of $150,000 at a fixed APR of 6% for 15 years. a. Calcu

Question

Consider a home mortgage of $150,000 at a fixed APR of 6% for 15 years. a. Calculate the monthly payment. b. Determine the total amount paid over the term of the loan. c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for inter a. The monthly payment is$ (Do not round until the final answer. Then round to the nearest cent as needed.) b. The total amount paid over the term of the loan is $ Round to the nearest cent as needed.) c Of the total amount paid % is paid toward the principal, and % is paid for interest. Round to one decimal place as needed.)

Explanation / Answer

a) Monthly payment

= pmt(0.06/12, 15*12, 150000) [Excel Formula]

= $ 1265.79

b) Total amount paid over the term of loan = $ 1265.79*15*12 = $ 227842.20

c) Interest = $ 227842.20 - $ 150000 = $ 77842.20

Hence,

% paid towards the principal = 150000/227842.20 = 65.8%

% paid towards the interest = 77842.20/227842.20 = 34.2%

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