Megan\'s Telegraph Hill House Megan bought a house in Telegraph Hill for $2,500,

ID: 2773802 • Letter: M

Question

Megan's Telegraph Hill House Megan bought a house in Telegraph Hill for $2,500,000. The annual interest rate is 4%. Mortgage payments will be monthly. This is a 15 year mortgage. Megan put a 20% downpayment on the house. How much will Megan's monthly mortgage payment be? What will be the principal remaining for the second month? Extra credit: complete the mortgage amortization schedule for all 180 months. Megan's Telegraph Hill House Megan bought a house in Telegraph Hill for $2,500,000. The annual interest rate is 4%. Mortgage payments will be monthly. This is a 15 year mortgage. Megan put a 20% downpayment on the house. How much will Megan's monthly mortgage payment be? What will be the principal remaining for the second month? Extra credit: complete the mortgage amortization schedule for all 180 months.

Explanation / Answer

Answer :-

Loan Amount = 2500000

Down payment = 2500000 * 20%

= 500000

Net Amount = 2500000 - 500000

= 2000000

Interest rate = 4% per annuam

= 4 / 12 = .33% per month

Period = 15 years

= 15 * 12 = 180 months

Loan payment (monthly basis) = 2000000 / [ 1 / ( 1 + r)n]

= 2000000 / [ 1 / (1 + .33%)180]

= 2000000 / [ 1 / 1.0033)180]

= 2000000 / 135.56

= 14754

=2000000 * 4% *1/12

=6667

=14754 - 6667

= 8087

=2000000 - 8087

=1991913

=1991913 * 4% * 1/12

=6640

=14754 - 6640

=8114

=1991913 - 8114

= 1983799

Loan Amount Monthly Payment Interest Principal Amount Net Loan amount 2000000 14754