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John plans to borrow $400,000 from his bank, which agrees that John should repay the loan...

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Finance

John plans to borrow $400,000 from his bank, which agrees thatJohn should repay the loan in 180 equal end -of-months payments.The annuel interest rate is 4.5%, compounded monthly.

(1) what is the amount of each monthly payment? show yourcalculation

(2) How much is the total interest in dollars amount will Johnpay over a 15 year life of the loan? Show your calculation

(3) complete the following loan amortization schedule for thefirst 6 months and the last month. Rounding amounts to the nearestdollar.

Answer & Explanation Solved by verified expert
4.2 Ratings (842 Votes)
1PVOrdinary Annuity C11i100ni100C Cash flow per periodi interest raten number of payments400000 Cash Flow11 4512001512451200Cash Flow 305997 monthly    See Answer
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Transcribed Image Text

John plans to borrow $400,000 from his bank, which agrees thatJohn should repay the loan in 180 equal end -of-months payments.The annuel interest rate is 4.5%, compounded monthly.(1) what is the amount of each monthly payment? show yourcalculation(2) How much is the total interest in dollars amount will Johnpay over a 15 year life of the loan? Show your calculation(3) complete the following loan amortization schedule for thefirst 6 months and the last month. Rounding amounts to the nearestdollar.

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