Judy recently purchased her first home for $220,000. She made a down payment of $20,000, and...

60.1K

Verified Solution

Question

Finance

Judy recently purchased her first home for $220,000. She made adown payment of $20,000, and financed the balance over 15 years, at6% interest. How much is her principal and interest payment eachmonth?

Answer & Explanation Solved by verified expert

3.9 Ratings (716 Votes)

The interest will be charged on the amount of 200000 ie Purchase price Down payment So Financed amount will be Financed amount 220000 20000 200000 Interest rate 6 or 006 per year Monthly interest rate 6 12 05 or 0005 per month No of EMIs 15 12 months 180 months For calculating the amount of each EMI we will use the following formula A P r 1 rn 1 rn 1 where A is the amount of EMI P is the financed amount r is the rate of interest per period and n is the no of periods Putting the values in the above equation we get A 200000 0005 1 0005180 1 0005180 1 A 200000 0005 1005180 1005180 1 A 200000 0005 24540 24540 1 A 200000 001227 1454 A 200000 0008438 A 168771 So every month EMI will be of amount 168771 will be paid for 180 months And interest will be charged at the rate of 05 on the outstanding balance at the end of each month For example interest for First month is 200000 0005 1000 Second month is 19931229 0005 99656 The required amortization table with interest and principal amount is given below Period EMI Interest Principal Balance 0 Rs 20000000 1 Rs 168771 Rs 100000 Rs 68771 Rs 19931229 2 Rs 168771 Rs 99656 Rs 69115 Rs 19862113 3 Rs 168771 Rs 99311 Rs 69461 Rs 19792653 4 Rs 168771 Rs 98963 Rs 69808 Rs 19722845 5 Rs 168771 Rs 98614 Rs 70157 Rs 19652687 6 Rs 168771 Rs 98263 Rs 70508 Rs 19582179 7 Rs 168771 Rs 97911 Rs 70860 Rs 19511319 8 Rs 168771 Rs 97557 Rs 71215 Rs 19440104 9 Rs 168771 Rs 97201 Rs 71571 Rs 19368533 10 Rs 168771 Rs 96843 Rs 71929 Rs 19296605 11 Rs 168771 Rs 96483 Rs 72288 Rs 19224316 12 Rs 168771 Rs 96122 Rs 72650 Rs 19151667 13 Rs 168771 Rs 95758 Rs 73013 Rs 19078653 14 Rs 168771 Rs 95393 Rs 73378 Rs 19005275 15 Rs 168771 Rs 95026 Rs 73745 Rs 18931530 16 Rs 168771 Rs 94658 Rs 74114 Rs 18857417 17 Rs 168771 Rs 94287 Rs 74484 Rs See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member