Question

Louise Grantham is buying a home for $198,500 with a 20% down payment. She has a 5.75% loan for 25 years. Create amortization schedule for the first two months of her loan.

Answer 1

P = (Po*r*t)/(1-(1+r)^-t).

100% 20% = 80% = 0.8
Po = 0.8 * 198,500 = $158,800

r = (5.75%/12)/100% = 0.00479 Monthly %
rate.

t = 25yrs. * 12mo/yr. = 300 Months.

Plug the given values into the Eq and
get: P = $299,706.29

I=P-Po=299,706.29 - 158,800=$140,906.29,
Total.

Monthly Payments = P/t = 299,706.29/300=
$999.02


Amortization Table:

Payment---Int.---Prin.---Bal.
00.00-----0.00---0.00----$158,800.00
999.02----760.92-238.10--$158,561.90
999.02----759.78-239.24--$158,322.66

Amortization Calculations: t = 1 Month.

1. I = Po*r*t = 158,800*(0.0575/12)*1 =
760.92
Prin. = 999.02-760.92 = 238.10
Bal. = 158,800-238.10 = $158,651.90

2. I = Po2*r*t=158,561.90*(0.0575/12)*1=
$759.78
Prin. = 999.02-759.78 = $239.24
Bal. = 158,561.90-239.24 = $158,322.66