# monthly payments

Jun 17th, 2015
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Howard Payne University
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Prepare an amortization table for the first six months of the traditional 30-year mortgage. How much of the first payment goes toward the principal.

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Question: What are the monthly payments for a 30-year traditional mortgage? What are the payments for a 20-year traditional mortgage?Answer:The payment for a loan repaid with equalpaymentsis the annuity payment with the loanvalue as the PV of the annuity. So, the 30-year loan payment will be:PVA =C({1 [1/(1 +r)]t} /r)\$25,000,000 =C{[1 1 / (1 + .068/12)360] / (.068/12)}C=\$162,981.30And the monthly payments for the 20-year loan will be:PVA =C({1 [1/(1 +r)]t} /r)\$25,000,000 =C{[1 1 / (1 + .068/12)240] / (.068/12)}C=\$190,834.88Question: Prepare an amortization table for the first six months of the traditional 30-year mortgage. How much of the first payment goes toward the principal?Answer:Year Beginning Bal. Total Payment Interest Payment Principal Payment Ending Bal.1 \$25,000,000.00 \$162,981.30 \$141,666.67 \$21,314.63 \$24,978,685.372 24,978,685.37 162,981.30 141,545.88 21,435.41 24,957,249.963 24,957,249.96 162,981.30 141,424.42 21,556.88 24,935,693.084 24,935,693.08 162,981.30 141,302.26 21,679.04 24,914,014.045 24,914,014.04 162,981.30 141,179.41 21,801.80 24,892,212.166 24,892,212.16 162,981.30 141,055.87 21,925.43 24,870,286.733.) How long would it take for S&S Air to pay off the smart

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