Question

Construct an amortization schedule for the first three months and the final three months of payments for a 30-year, 7 percent mortgage in the amount of $90,000. What percentage of the third payment is principal

Answer 1

a. First three months and final three months of payments:

Monthly Amortization Schedule

Beginning Balance Interest Principal Ending Balance

1 $90,000.00 $525.00 $73.77 $89,926.23

2 $89,926.23 $524.57 $74.20 $89,852.03

3 $89,852.03 $524.14 $74.63 $89,777.39

358 $1,775.56 $10.36 $588.41 $1,187.15

359 $1,187.15 $6.93 $591.84 $595.30

360 $595.30 $3.47 $595.30 $0.00

b. The percentage of the third payment that is principal is 12.46% ($74.63/$598.77 * 100)

Step-by-step explanation:

a) Data and Calculations:

Mortgage loan = $90,000

Interest rate = 7%

Period of mortgage = 30 years

Repayment = monthly

Monthly Pay: $598.77

Total number of payments = 360

Loan Payments = $215,558.01

Total Interest = $125,558.01