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A loan is for $600,000 (mortgage), 30 years monthly, 4% fixedrate interest. What is...

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Accounting

A loan is for $600,000 (mortgage), 30 years monthly, 4% fixedrate interest. What is the payment, 5-year payoff, 5-year principalpaid, and 5-year interest paid?

Answer & Explanation Solved by verified expert
4.3 Ratings (614 Votes)

Step-1:Calculation of monthly payment
Monthly Payment = Loan amount / Present value of annuity of 1
= $       6,00,000 / 209.47136
= $       2,864.35
Working:
Present value of annuity of 1 = (1-(1+i)^-n)/i Where,
= (1-(1+0.003333)^-360)/0.003333 i 4%/12 = 0.003333
= 209.4713584 n 30*12 = 360
Step-2:Calculation of 5-year payoff, 5-year principal paid, and 5-year interest paid
5-year payoff = $       2,864.35 * 360 = $ 10,31,167.23
5-year principal paid $    6,00,000.00
5-year interest paid $    4,31,167.23

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In: AccountingA loan is for $600,000 (mortgage), 30 years monthly, 4% fixedrate interest. What is the...A loan is for $600,000 (mortgage), 30 years monthly, 4% fixedrate interest. What is the payment, 5-year payoff, 5-year principalpaid, and 5-year interest paid?

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