Chapter 14.I, Problem 2TIE

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8th Edition

Robert Brechner + 1 other

ISBN: 9781305585447

Textbook Problem

Prepare an amortization schedule of the first four payments of a $125,000 mortgage at

**for 15 years. Use Table 14-1 to calculate the amount of the monthly payment.**

**TABLE 14-1 Monthly Payments to Amortize Principal and Interest per $1,000 Financed**

**Monthly Payments**

**(Necessary to amortize a loan of $1,000)**

Interest |
5 |
10 |
15 |
20 |
25 |
30 |
35 |
40 |

Rate (%) |
Years |
Years |
Years |
Years |
Years |
Years |
Years |
Years |

3.50 |
$18.19 | $9.89 | $7.15 | $5.80 | $5.01 | $4.49 | $4.13 | $3.87 |

3.75 |
18.30 | 10.01 | 7.27 | 5.93 | 5.14 | 4.63 | 4.28 | 4.03 |

4.00 |
18.42 | 10.12 | 7.40 | 6.06 | 5.28 | 4.77 | 4.43 | 4.18 |

4.25 |
18.53 | 10.24 | 7.52 | 6.19 | 5.42 | 4.92 | 4.58 | 4.34 |

4.50 |
18.64 | 10.36 | 7.65 | 6.33 | 5.56 | 5.07 | 4.73 | 4.50 |

4.75 |
18.76 | 10.48 | 7.78 | 6.46 | 5.70 | 5.22 | 4.89 | 4.66 |

5.00 |
18.88 | 10.61 | 7.91 | 6.60 | 5.85 | 5.37 | 5.05 | 4.83 |

5.25 |
18.99 | 10.73 | 8.04 | 6.74 | 6.00 | 5.53 | 5.21 | 4.99 |

5.50 |
19.11 | 10.86 | 8.18 | 6.88 | 6.15 | 5.68 | 5.38 | 5.16 |

5.75 |
19.22 | 10.98 | 8.31 | 7.03 | 6.30 | 5.84 | 5.54 | 5.33 |

6.00 |
19.34 | 11.11 | 8.44 | 7.17 | 6.45 | 6.00 | 5.71 | 5.51 |

6.25 |
19.45 | 11.23 | 8.58 | 7.31 | 6.60 | 6.16 | 5.88 | 5.68 |

6.50 |
19.57 | 11.36 | 8.72 | 7.46 | 6.76 | 6.33 | 6.05 | 5.86 |

6.75 |
19.69 | 11.49 | 8.85 | 7.61 | 6.91 | 6.49 | 6.22 | 6.04 |

7.00 |
19.81 | 11.62 | 8.99 | 7.76 | 7.07 | 6.66 | 6.39 | 6.22 |

7.25 |
19.92 | 11.75 | 9.13 | 7.91 | 7.23 | 6.83 | 6.57 | 6.40 |

7.50 |
20.04 | 11.88 | 9.28 | 8.06 | 7.39 | 7.00 | 6.75 | 6.59 |

7.75 |
20.16 | 12.01 | 9.42 | 8.21 | 7.56 | 7.17 | 6.93 | 6.77 |

8.00 |
20.28 | 12.14 | 9.56 | 8.37 | 7.72 | 7.34 | 7.11 | 6.96 |

8.25 |
20.40 | 12.27 | 9.71 | 8.53 | 7.89 | 7.52 | 7.29 | 7.15 |

8.50 |
20.52 | 12.40 | 9.85 | 8.68 | 8.06 | 7.69 | 7.47 | 7.34 |

8.75 |
20.64 | 12.54 | 10.00 | 8.84 | 8.23 | 7.87 | 7.66 | 7.53 |

9.00 |
20.76 | 12.67 | 10.15 | 9.00 | 8.40 | 8.05 | 7.84 | 7.72 |

9.25 |
20.88 | 12.81 | 10.30 | 9.16 | 8.57 | 8.23 | 8.03 | 7.91 |

9.50 |
21.01 | 12.94 | 10.45 | 9.33 | 8.74 | 8.41 | 8.22 | 8.11 |

9.75 |
21.13 | 13.08 | 10.60 | 9.49 | 8.92 | 8.60 | 8.41 | 8.30 |

10.00 |
21.25 | 13.22 | 10.75 | 9.66 | 9.09 | 8.78 | 8.60 | 8.50 |

10.25 |
21.38 | 13.36 | 10.90 | 9.82 | 9.27 | 8.97 | 8.79 | 8.69 |

10.50 |
21.50 | 13.50 | 11.06 | 9.99 | 9.45 | 9.15 | 8.99 | 8.89 |

10.75 |
21.62 | 13.64 | 11.21 | 10.16 | 9.63 | 9.34 | 9.18 | 9.09 |

11.00 |
21.75 | 13.78 | 11.37 | 10.33 | 9.81 | 9.53 | 9.37 | 9.29 |

11.25 |
21.87 | 13.92 | 11.53 | 10.50 | 9.99 | 9.72 | 9.57 | 9.49 |

11.50 |
22.00 | 14.06 | 11.69 | 10.67 | 10.17 | 9.91 | 9.77 | 9.69 |

11.75 |
22.12 | 14.21 | 11.85 | 10.84 | 10.35 | 10.10 | 9.96 | 9.89 |

12.00 |
22.25 | 14.35 | 12.01 | 11.02 | 10.54 | 10.29 | 10.16 | 10.09 |

12.25 |
22.38 | 14.50 | 12.17 | 11.19 | 10.72 | 10.48 | 10.36 | 10.29 |

12.50 |
22.50 | 14.64 | 12.33 | 11.37 | 10.91 | 10.68 | 10.56 | 10.49 |

12.75 |
22.63 | 14.79 | 12.49 | 11.54 | 11.10 | 10.87 | 10.76 | 10.70 |

13.00 |
22.76 | 14.94 | 12.66 | 11.72 | 11.28 | 11.07 | 10.96 | 10.90 |

To determine

**To calculate:** The monthly payment and prepare an amortization schedule of the first four payments of $125,000 mortgage at 6% for 15years.

Explanation

**Given Information:**

The amortization schedule is needed to prepare for $125,000 mortgage at 6% for 15years.

**Formula used:**

The monthly payment is calculated by the use of the formula:

The amortization schedule is prepared by the use of these steps:

Step1: Calculate monthly payment

Step 2: Calculate the amount of interest by using formula

Step 3: Calculate portion of payment reducing principal by using formula:

Step4: Now calculate the outstanding balance by using formula:

**Calculation:**

Consider the provided amount,

Now, for the Month I

The number of 1000s financed is

And from the table the table factor 6%, 15years is equal to 8.44

Now by the use of the monthly payment formula monthly payment of the first month

Is equal to

Sect-14.I P-1TIESect-14.I P-2TIESect-14.I P-3TIESect-14.I P-4TIESect-14.I P-5TIESect-14.I P-1RESect-14.I P-2RESect-14.I P-3RESect-14.I P-4RESect-14.I P-5RE

Sect-14.I P-6RESect-14.I P-7RESect-14.I P-8RESect-14.I P-9RESect-14.I P-10RESect-14.I P-11RESect-14.I P-12RESect-14.I P-13RESect-14.I P-14RESect-14.I P-15RESect-14.I P-16RESect-14.I P-17RESect-14.I P-18RESect-14.I P-19RESect-14.I P-20RESect-14.I P-21RESect-14.I P-22RESect-14.II P-6TIESect-14.II P-7TIESect-14.II P-1RESect-14.II P-2RESect-14.II P-3RESect-14.II P-4RESect-14.II P-5RESect-14.II P-6RESect-14.II P-7RESect-14.II P-8RESect-14.II P-9RESect-14.II P-10RESect-14.II P-11RESect-14.II P-12RESect-14.II P-13RESect-14.II P-14RESect-14.II P-15RESect-14.II P-16RESect-14.II P-17RESect-14.II P-18RESect-14.II P-19RESect-14.II P-20RESect-14.II P-21RESect-14.II P-22RECh-14 P-1CRCh-14 P-2CRCh-14 P-3CRCh-14 P-4CRCh-14 P-5CRCh-14 P-6CRCh-14 P-7CRCh-14 P-8CRCh-14 P-9CRCh-14 P-10CRCh-14 P-11CRCh-14 P-12CRCh-14 P-13CRCh-14 P-14CRCh-14 P-1ATCh-14 P-2ATCh-14 P-3ATCh-14 P-4ATCh-14 P-5ATCh-14 P-6ATCh-14 P-7ATCh-14 P-8ATCh-14 P-9ATCh-14 P-10ATCh-14 P-11ATCh-14 P-12ATCh-14 P-13ATCh-14 P-14ATCh-14 P-15ATCh-14 P-16ATCh-14 P-17ATCh-14 P-18ATCh-14 P-19ATCh-14 P-20ATCh-14 P-21ATCh-14 P-22AT

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