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Suppose that a 15-year mortgage loan for $200,000 is obtained. The mortgage is a level-payment, fixed-rate,...

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Finance

Suppose that a 15-year mortgage loan for $200,000 is obtained.The mortgage is a level-payment, fixed-rate, fully amortizedmortgage and the mortgage rate is 7.0% (APR, monthly).

a. Find the monthly mortgage payment.

b. Compute an amortization schedule for the first sixmonths.

c. What will the mortgage balance be at the end of the 15thyear?

d. If an investor purchased this mortgage, what will the timingof the cash flow be assuming that the borrower does notdefault?

Answer & Explanation Solved by verified expert
3.7 Ratings (456 Votes)

Loan Amount $                            200,000.00
Interest Rate 7.000%
Monthly interest 0.00583
PMT=(Monthly Rate,Number of payments,Loan Amount)
Monthly Payment ($1,797.21)
Mortgage Balance at the end of 15 th year is Zero
Loan Amortization Schedule
Payment Interest Principal Balance
0 200000.00
1 1797.21 1166.67 630.54 199369.46
2 1797.21 1162.99 634.22 198735.24
3 1797.21 1159.29 637.92 198097.31
4 1797.21 1155.57 641.64 197455.67
5 1797.21 1151.82 645.39 196810.29
6 1797.21 1148.06 649.15 196161.14
7 1797.21 1144.27 652.94 195508.20
8 1797.21 1140.46 656.75 194851.45
9 1797.21 1136.63 660.58 194190.88
10 1797.21 1132.78 664.43 193526.45
11 1797.21 1128.90 668.31 192858.14
12 1797.21 1125.01 672.20 192185.94
13 1797.21 1121.08 676.13 191509.81
14 1797.21 1117.14 680.07 190829.74
15 1797.21 1113.17 684.04 190145.71
16 1797.21 1109.18 688.03 189457.68
17 1797.21 1105.17 692.04 188765.64
18 1797.21 1101.13 696.08 188069.56
19 1797.21 1097.07 700.14 187369.43
20 1797.21 1092.99 704.22 186665.20
21 1797.21 1088.88 708.33 185956.87
22 1797.21 1084.75 712.46 185244.41
23 1797.21 1080.59 716.62 184527.79
24 1797.21 1076.41 720.80 183807.00
25 1797.21 1072.21 725.00 183081.99
26 1797.21 1067.98 729.23 182352.76
27 1797.21 1063.72 733.49 181619.28
28 1797.21 1059.45 737.76 180881.51
29 1797.21 1055.14 742.07 180139.44
30 1797.21 1050.81 746.40 179393.05
31 1797.21 1046.46 750.75 178642.30
32 1797.21 1042.08 755.13 177887.17
33 1797.21 1037.68 759.53 177127.63
34 1797.21 1033.24 763.97 176363.67
35 1797.21 1028.79 768.42 175595.25
36 1797.21 1024.31 772.90 174822.34
37 1797.21 1019.80 777.41 174044.93
38 1797.21 1015.26 781.95 173262.98
39 1797.21 1010.70 786.51 172476.47
40 1797.21 1006.11 791.10 171685.37
41 1797.21 1001.50 795.71 170889.66
42 1797.21 996.86 800.35 170089.31
43 1797.21 992.19 805.02 169284.29
44 1797.21 987.49 809.72 168474.57
45 1797.21 982.77 814.44 167660.13
46 1797.21 978.02 819.19 166840.93
47 1797.21 973.24 823.97 166016.96
48 1797.21 968.43 828.78 165188.18
49 1797.21 963.60 833.61 164354.57
50 1797.21 958.74 838.47 163516.10
51 1797.21 953.84 843.37 162672.73
52 1797.21 948.92 848.29 161824.45
53 1797.21 943.98 853.23 160971.21
54 1797.21 939.00 858.21 160113.00
55 1797.21 933.99 863.22 159249.78
56 1797.21 928.96 868.25 158381.53
57 1797.21 923.89 873.32 157508.21
58 1797.21 918.80 878.41 156629.80
59 1797.21 913.67 883.54 155746.26
60 1797.21 908.52 888.69 154857.57
61 1797.21 903.34 893.87 153963.70
62 1797.21 898.12 899.09 153064.61
63 1797.21 892.88 904.33 152160.28
64 1797.21 887.60 909.61 151250.67
65 1797.21 882.30 914.91 150335.75
66 1797.21 876.96 920.25 149415.50
67 1797.21 871.59 925.62 148489.88
68 1797.21 866.19 931.02 147558.86
69 1797.21 860.76 936.45 146622.41
70 1797.21 855.30 941.91 145680.50
71 1797.21 849.80 947.41 144733.10
72 1797.21 844.28 952.93 143780.16
73 1797.21 838.72 958.49 142821.67
74 1797.21 833.13 964.08 141857.59
75 1797.21 827.50 969.71 140887.88
76 1797.21 821.85 975.36 139912.51
77 1797.21 816.16 981.05 138931.46
78 1797.21 810.43 986.78 137944.68
79 1797.21 804.68 992.53 136952.15
80 1797.21 798.89 998.32 135953.83
81 1797.21 793.06 1004.15 134949.68
82 1797.21 787.21 1010.00 133939.68
83 1797.21 781.31 1015.90 132923.78
84 1797.21 775.39 1021.82 131901.96
85 1797.21 769.43 1027.78 130874.18
86 1797.21 763.43 1033.78 129840.40
87 1797.21 757.40 1039.81 128800.60
88 1797.21 751.34 1045.87 127754.72
89 1797.21 745.24 1051.97 126702.75
90 1797.21 739.10 1058.11 125644.64
91 1797.21 732.93 1064.28 124580.36
92 1797.21 726.72 1070.49 123509.86
93 1797.21 720.47 1076.74 122433.13
94 1797.21 714.19 1083.02 121350.11
95 1797.21 707.88 1089.33 120260.78
96 1797.21 701.52 1095.69 119165.09
97 1797.21 695.13 1102.08 118063.01
98 1797.21 688.70 1108.51 116954.50
99 1797.21 682.23 1114.98 115839.52
100 1797.21 675.73 1121.48 114718.04
101 1797.21 669.19 1128.02 113590.02
102 1797.21 662.61 1134.60 112455.42
103 1797.21 655.99 1141.22 111314.20
104 1797.21 649.33 1147.88 110166.32
105 1797.21 642.64 1154.57 109011.75
106 1797.21 635.90 1161.31 107850.44
107 1797.21 629.13 1168.08 106682.36
108 1797.21 622.31 1174.90 105507.46
109 1797.21 615.46 1181.75 104325.71
110 1797.21 608.57 1188.64 103137.07
111 1797.21 601.63 1195.58 101941.49
112 1797.21 594.66 1202.55 100738.94
113 1797.21 587.64 1209.57 99529.38
114 1797.21 580.59 1216.62 98312.75
115 1797.21 573.49 1223.72 97089.04
116 1797.21 566.35 1230.86 95858.18
117 1797.21 559.17 1238.04 94620.14
118 1797.21 551.95 1245.26 93374.88
119 1797.21 544.69 1252.52 92122.36
120 1797.21 537.38 1259.83 90862.53
121 1797.21 530.03 1267.18 89595.35
122 1797.21 522.64 1274.57 88320.78
123 1797.21 515.20 1282.01 87038.77
124 1797.21 507.73 1289.48 85749.29
125 1797.21 500.20 1297.01 84452.28
126 1797.21 492.64 1304.57 83147.71
127 1797.21 485.03 1312.18 81835.53
128 1797.21 477.37 1319.84 80515.70
129 1797.21 469.67 1327.54 79188.16
130 1797.21 461.93 1335.28 77852.88
131 1797.21 454.14 1343.07 76509.81
132 1797.21 446.31 1350.90 75158.91
133 1797.21 438.43 1358.78 73800.13
134 1797.21 430.50 1366.71 72433.42
135 1797.21 422.53 1374.68 71058.74
136 1797.21 414.51 1382.70 69676.04
137 1797.21 406.44 1390.77 68285.27
138 1797.21 398.33 1398.88 66886.39
139 1797.21 390.17 1407.04 65479.35
140 1797.21 381.96 1415.25 64064.10
141 1797.21 373.71 1423.50 62640.60
142 1797.21 365.40 1431.81 61208.79
143 1797.21 357.05 1440.16 59768.63
144 1797.21 348.65 1448.56 58320.08
145 1797.21 340.20 1457.01 56863.07
146 1797.21 331.70 1465.51 55397.56
147 1797.21 323.15 1474.06 53923.50
148 1797.21 314.55 1482.66 52440.84
149 1797.21 305.90 1491.31 50949.54
150 1797.21 297.21 1500.00 49449.53
151 1797.21 288.46 1508.75 47940.78
152 1797.21 279.65 1517.56 46423.22
153 1797.21 270.80 1526.41 44896.82
154 1797.21 261.90 1535.31 43361.50
155 1797.21 252.94 1544.27 41817.24
156 1797.21 243.93 1553.28 40263.96
157 1797.21 234.87 1562.34 38701.62
158 1797.21 225.76 1571.45 37130.17
159 1797.21 216.59 1580.62 35549.56
160 1797.21 207.37 1589.84 33959.72
161 1797.21 198.10 1599.11 32360.61
162 1797.21 188.77 1608.44 30752.17
163 1797.21 179.39 1617.82 29134.34
164 1797.21 169.95 1627.26 27507.08
165 1797.21 160.46 1636.75 25870.33
166 1797.21 150.91 1646.30 24224.03
167 1797.21 141.31 1655.90 22568.13
168 1797.21 131.65 1665.56 20902.57
169 1797.21 121.93 1675.28 19227.29
170 1797.21 112.16 1685.05 17542.24
171 1797.21 102.33 1694.88 15847.36
172 1797.21 92.44 1704.77 14142.59
173 1797.21 82.50 1714.71 12427.88
174 1797.21 72.50 1724.71 10703.16
175 1797.21 62.44 1734.77 8968.39
176 1797.21 52.32 1744.89 7223.50
177 1797.21 42.14 1755.07 5468.42
178 1797.21 31.90 1765.31 3703.11
179 1797.21 21.60 1775.61 1927.50
180 1797.21 130.29 1927.50 0.00
Total 323497.8 123758.38 200000.00

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Transcribed Image Text

Suppose that a 15-year mortgage loan for $200,000 is obtained.The mortgage is a level-payment, fixed-rate, fully amortizedmortgage and the mortgage rate is 7.0% (APR, monthly).a. Find the monthly mortgage payment.b. Compute an amortization schedule for the first sixmonths.c. What will the mortgage balance be at the end of the 15thyear?d. If an investor purchased this mortgage, what will the timingof the cash flow be assuming that the borrower does notdefault?

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