# James and Regina Jameson want to buy their first home. They have found a home costing $170,000... ## Question: James and Regina Jameson want to buy their first home. They have found a home costing$170,000 and could put 10 percent down.

a) If they could get a mortgage at 6.0 percent for 25 years, calculate their monthly payment (principal plus interest)?

b) How much total interest would they pay over the 25 years?

c) How much of the very first payment would go to interest?

d) How much of the very first payment would go on the principal?

## Mortgage Payments:

A mortgage is a loan taken for the purpose of purchasing a home. The terms of the loan which include the amount, interest rate, time period are key variables in calculating the periodic payments that the investor makes. The payments consist of the interest for the period and part payment of the mortgage amount.

a) If they could get a mortgage at 6.0 percent for 25 years, calculate their monthly payment (principal plus interest)?

• {eq}Loan = Payment * \dfrac{(1 - (1 + r )^{-n}) }{ r} {/eq}

Price = $170,000 Down payment =(0.1 *170,000) =$17,000

Loan = 170,000 - 17,000 = $153,000 APR = 6% adjusted for monthly compounding = 0.06/12 = 0.005 n = 25 years adjusted for monthly compounding = 25 * 12 = 300 • {eq}153,000 = Payment * \dfrac{(1 - (1 + 0.005 )^{-300}) }{0.005} {/eq} • {eq}153,000 = Payment * 155.206864 {/eq} • {eq}Payment =\dfrac{153,000 }{155.206864} {/eq} • {eq}Payment =$985.78 {/eq}

b) How much total interest would they pay over the 25 years?

• Total Interest = Total Payments - Loan Amount
• Total Interest = (985.78 * 300) - 153,000
• Total Interest = $142,734 c) How much of the very first payment would go to interest? The monthly payment =$985.78

The interest paid ;

• Interest = Interest rate * Beginning loan balance
• Interest =(0.06/12) *153,000
• Interest =$765 d) How much of the very first payment would go on the principal? • Principal paid = Monthly payment - interest paid • Principal paid = 985.78 - 765 • Principal paid =$220.78

Amortization Schedule

Period Beginning Balance Total Payment Interest Paid Principal Paid Ending Balance
1 153,000.00 985.78 765.00 220.78 152,779.22
2 152,779.22 985.78 763.90 221.89 152,557.33
3 152,557.33 985.78 762.79 222.99 152,334.34
4 152,334.34 985.78 761.67 224.11 152,110.23
5 152,110.23 985.78 760.55 225.23 151,885.00
6 151,885.00 985.78 759.42 226.36 151,658.64
7 151,658.64 985.78 758.29 227.49 151,431.16
8 151,431.16 985.78 757.16 228.63 151,202.53
9 151,202.53 985.78 756.01 229.77 150,972.76
10 150,972.76 985.78 754.86 230.92 150,741.84
11 150,741.84 985.78 753.71 232.07 150,509.77
12 150,509.77 985.78 752.55 233.23 150,276.54
13 150,276.54 985.78 751.38 234.40 150,042.14
14 150,042.14 985.78 750.21 235.57 149,806.57
15 149,806.57 985.78 749.03 236.75 149,569.82
16 149,569.82 985.78 747.85 237.93 149,331.89
17 149,331.89 985.78 746.66 239.12 149,092.77
18 149,092.77 985.78 745.46 240.32 148,852.45
19 148,852.45 985.78 744.26 241.52 148,610.93
20 148,610.93 985.78 743.05 242.73 148,368.21
21 148,368.21 985.78 741.84 243.94 148,124.27
22 148,124.27 985.78 740.62 245.16 147,879.11
23 147,879.11 985.78 739.40 246.39 147,632.72
24 147,632.72 985.78 738.16 247.62 147,385.10
25 147,385.10 985.78 736.93 248.86 147,136.25
26 147,136.25 985.78 735.68 250.10 146,886.15
27 146,886.15 985.78 734.43 251.35 146,634.80
28 146,634.80 985.78 733.17 252.61 146,382.19
29 146,382.19 985.78 731.91 253.87 146,128.32
30 146,128.32 985.78 730.64 255.14 145,873.18
31 145,873.18 985.78 729.37 256.42 145,616.77
32 145,616.77 985.78 728.08 257.70 145,359.07
33 145,359.07 985.78 726.80 258.99 145,100.08
34 145,100.08 985.78 725.50 260.28 144,839.80
35 144,839.80 985.78 724.20 261.58 144,578.22
36 144,578.22 985.78 722.89 262.89 144,315.33
37 144,315.33 985.78 721.58 264.20 144,051.13
38 144,051.13 985.78 720.26 265.53 143,785.60
39 143,785.60 985.78 718.93 266.85 143,518.75
40 143,518.75 985.78 717.59 268.19 143,250.56
41 143,250.56 985.78 716.25 269.53 142,981.03
42 142,981.03 985.78 714.91 270.88 142,710.15
43 142,710.15 985.78 713.55 272.23 142,437.92
44 142,437.92 985.78 712.19 273.59 142,164.33
45 142,164.33 985.78 710.82 274.96 141,889.37
46 141,889.37 985.78 709.45 276.33 141,613.04
47 141,613.04 985.78 708.07 277.72 141,335.32
48 141,335.32 985.78 706.68 279.10 141,056.22
49 141,056.22 985.78 705.28 280.50 140,775.72
50 140,775.72 985.78 703.88 281.90 140,493.82
51 140,493.82 985.78 702.47 283.31 140,210.50
52 140,210.50 985.78 701.05 284.73 139,925.78
53 139,925.78 985.78 699.63 286.15 139,639.62
54 139,639.62 985.78 698.20 287.58 139,352.04
55 139,352.04 985.78 696.76 289.02 139,063.02
56 139,063.02 985.78 695.32 290.47 138,772.55
57 138,772.55 985.78 693.86 291.92 138,480.63
58 138,480.63 985.78 692.40 293.38 138,187.26
59 138,187.26 985.78 690.94 294.84 137,892.41
60 137,892.41 985.78 689.46 296.32 137,596.09
61 137,596.09 985.78 687.98 297.80 137,298.29
62 137,298.29 985.78 686.49 299.29 136,999.00
63 136,999.00 985.78 685.00 300.79 136,698.22
64 136,698.22 985.78 683.49 302.29 136,395.93
65 136,395.93 985.78 681.98 303.80 136,092.12
66 136,092.12 985.78 680.46 305.32 135,786.80
67 135,786.80 985.78 678.93 306.85 135,479.96
68 135,479.96 985.78 677.40 308.38 135,171.58
69 135,171.58 985.78 675.86 309.92 134,861.65
70 134,861.65 985.78 674.31 311.47 134,550.18
71 134,550.18 985.78 672.75 313.03 134,237.15
72 134,237.15 985.78 671.19 314.60 133,922.55
73 133,922.55 985.78 669.61 316.17 133,606.39
74 133,606.39 985.78 668.03 317.75 133,288.64
75 133,288.64 985.78 666.44 319.34 132,969.30
76 132,969.30 985.78 664.85 320.93 132,648.36
77 132,648.36 985.78 663.24 322.54 132,325.82
78 132,325.82 985.78 661.63 324.15 132,001.67
79 132,001.67 985.78 660.01 325.77 131,675.90
80 131,675.90 985.78 658.38 327.40 131,348.50
81 131,348.50 985.78 656.74 329.04 131,019.46
82 131,019.46 985.78 655.10 330.68 130,688.78
83 130,688.78 985.78 653.44 332.34 130,356.44
84 130,356.44 985.78 651.78 334.00 130,022.44
85 130,022.44 985.78 650.11 335.67 129,686.77
86 129,686.77 985.78 648.43 337.35 129,349.42
87 129,349.42 985.78 646.75 339.03 129,010.39
88 129,010.39 985.78 645.05 340.73 128,669.66
89 128,669.66 985.78 643.35 342.43 128,327.23
90 128,327.23 985.78 641.64 344.15 127,983.08
91 127,983.08 985.78 639.92 345.87 127,637.22
92 127,637.22 985.78 638.19 347.60 127,289.62
93 127,289.62 985.78 636.45 349.33 126,940.29
94 126,940.29 985.78 634.70 351.08 126,589.21
95 126,589.21 985.78 632.95 352.84 126,236.37
96 126,236.37 985.78 631.18 354.60 125,881.77
97 125,881.77 985.78 629.41 356.37 125,525.40
98 125,525.40 985.78 627.63 358.15 125,167.25
99 125,167.25 985.78 625.84 359.94 124,807.30
100 124,807.30 985.78 624.04 361.74 124,445.56
101 124,445.56 985.78 622.23 363.55 124,082.00
102 124,082.00 985.78 620.41 365.37 123,716.63
103 123,716.63 985.78 618.58 367.20 123,349.44
104 123,349.44 985.78 616.75 369.03 122,980.40
105 122,980.40 985.78 614.90 370.88 122,609.52
106 122,609.52 985.78 613.05 372.73 122,236.79
107 122,236.79 985.78 611.18 374.60 121,862.19
108 121,862.19 985.78 609.31 376.47 121,485.72
109 121,485.72 985.78 607.43 378.35 121,107.37
110 121,107.37 985.78 605.54 380.24 120,727.12
111 120,727.12 985.78 603.64 382.15 120,344.98
112 120,344.98 985.78 601.72 384.06 119,960.92
113 119,960.92 985.78 599.80 385.98 119,574.95
114 119,574.95 985.78 597.87 387.91 119,187.04
115 119,187.04 985.78 595.94 389.85 118,797.19
116 118,797.19 985.78 593.99 391.80 118,405.40
117 118,405.40 985.78 592.03 393.75 118,011.64
118 118,011.64 985.78 590.06 395.72 117,615.92
119 117,615.92 985.78 588.08 397.70 117,218.22
120 117,218.22 985.78 586.09 399.69 116,818.53
121 116,818.53 985.78 584.09 401.69 116,416.84
122 116,416.84 985.78 582.08 403.70 116,013.14
123 116,013.14 985.78 580.07 405.72 115,607.43
124 115,607.43 985.78 578.04 407.74 115,199.69
125 115,199.69 985.78 576.00 409.78 114,789.90
126 114,789.90 985.78 573.95 411.83 114,378.07
127 114,378.07 985.78 571.89 413.89 113,964.18
128 113,964.18 985.78 569.82 415.96 113,548.22
129 113,548.22 985.78 567.74 418.04 113,130.18
130 113,130.18 985.78 565.65 420.13 112,710.05
131 112,710.05 985.78 563.55 422.23 112,287.82
132 112,287.82 985.78 561.44 424.34 111,863.48
133 111,863.48 985.78 559.32 426.46 111,437.01
134 111,437.01 985.78 557.19 428.60 111,008.42
135 111,008.42 985.78 555.04 430.74 110,577.68
136 110,577.68 985.78 552.89 432.89 110,144.79
137 110,144.79 985.78 550.72 435.06 109,709.73
138 109,709.73 985.78 548.55 437.23 109,272.50
139 109,272.50 985.78 546.36 439.42 108,833.08
140 108,833.08 985.78 544.17 441.62 108,391.46
141 108,391.46 985.78 541.96 443.82 107,947.64
142 107,947.64 985.78 539.74 446.04 107,501.59
143 107,501.59 985.78 537.51 448.27 107,053.32
144 107,053.32 985.78 535.27 450.51 106,602.81
145 106,602.81 985.78 533.01 452.77 106,150.04
146 106,150.04 985.78 530.75 455.03 105,695.01
147 105,695.01 985.78 528.48 457.31 105,237.70
148 105,237.70 985.78 526.19 459.59 104,778.11
149 104,778.11 985.78 523.89 461.89 104,316.22
150 104,316.22 985.78 521.58 464.20 103,852.02
151 103,852.02 985.78 519.26 466.52 103,385.50
152 103,385.50 985.78 516.93 468.85 102,916.64
153 102,916.64 985.78 514.58 471.20 102,445.45
154 102,445.45 985.78 512.23 473.55 101,971.89
155 101,971.89 985.78 509.86 475.92 101,495.97
156 101,495.97 985.78 507.48 478.30 101,017.67
157 101,017.67 985.78 505.09 480.69 100,536.98
158 100,536.98 985.78 502.68 483.10 100,053.88
159 100,053.88 985.78 500.27 485.51 99,568.37
160 99,568.37 985.78 497.84 487.94 99,080.43
161 99,080.43 985.78 495.40 490.38 98,590.05
162 98,590.05 985.78 492.95 492.83 98,097.22
163 98,097.22 985.78 490.49 495.30 97,601.92
164 97,601.92 985.78 488.01 497.77 97,104.15
165 97,104.15 985.78 485.52 500.26 96,603.89
166 96,603.89 985.78 483.02 502.76 96,101.13
167 96,101.13 985.78 480.51 505.28 95,595.86
168 95,595.86 985.78 477.98 507.80 95,088.05
169 95,088.05 985.78 475.44 510.34 94,577.71
170 94,577.71 985.78 472.89 512.89 94,064.82
171 94,064.82 985.78 470.32 515.46 93,549.36
172 93,549.36 985.78 467.75 518.03 93,031.33
173 93,031.33 985.78 465.16 520.62 92,510.70
174 92,510.70 985.78 462.55 523.23 91,987.48
175 91,987.48 985.78 459.94 525.84 91,461.63
176 91,461.63 985.78 457.31 528.47 90,933.16
177 90,933.16 985.78 454.67 531.12 90,402.04
178 90,402.04 985.78 452.01 533.77 89,868.27
179 89,868.27 985.78 449.34 536.44 89,331.83
180 89,331.83 985.78 446.66 539.12 88,792.71
181 88,792.71 985.78 443.96 541.82 88,250.89
182 88,250.89 985.78 441.25 544.53 87,706.37
183 87,706.37 985.78 438.53 547.25 87,159.12
184 87,159.12 985.78 435.80 549.99 86,609.13
185 86,609.13 985.78 433.05 552.74 86,056.40
186 86,056.40 985.78 430.28 555.50 85,500.90
187 85,500.90 985.78 427.50 558.28 84,942.62
188 84,942.62 985.78 424.71 561.07 84,381.55
189 84,381.55 985.78 421.91 563.87 83,817.68
190 83,817.68 985.78 419.09 566.69 83,250.99
191 83,250.99 985.78 416.25 569.53 82,681.46
192 82,681.46 985.78 413.41 572.37 82,109.09
193 82,109.09 985.78 410.55 575.24 81,533.85
194 81,533.85 985.78 407.67 578.11 80,955.74
195 80,955.74 985.78 404.78 581.00 80,374.74
196 80,374.74 985.78 401.87 583.91 79,790.83
197 79,790.83 985.78 398.95 586.83 79,204.00
198 79,204.00 985.78 396.02 589.76 78,614.24
199 78,614.24 985.78 393.07 592.71 78,021.53
200 78,021.53 985.78 390.11 595.67 77,425.86
201 77,425.86 985.78 387.13 598.65 76,827.21
202 76,827.21 985.78 384.14 601.65 76,225.56
203 76,225.56 985.78 381.13 604.65 75,620.91
204 75,620.91 985.78 378.10 607.68 75,013.23
205 75,013.23 985.78 375.07 610.71 74,402.52
206 74,402.52 985.78 372.01 613.77 73,788.75
207 73,788.75 985.78 368.94 616.84 73,171.91
208 73,171.91 985.78 365.86 619.92 72,551.99
209 72,551.99 985.78 362.76 623.02 71,928.97
210 71,928.97 985.78 359.64 626.14 71,302.83
211 71,302.83 985.78 356.51 629.27 70,673.56
212 70,673.56 985.78 353.37 632.41 70,041.15
213 70,041.15 985.78 350.21 635.58 69,405.58
214 69,405.58 985.78 347.03 638.75 68,766.82
215 68,766.82 985.78 343.83 641.95 68,124.88
216 68,124.88 985.78 340.62 645.16 67,479.72
217 67,479.72 985.78 337.40 648.38 66,831.34
218 66,831.34 985.78 334.16 651.62 66,179.71
219 66,179.71 985.78 330.90 654.88 65,524.83
220 65,524.83 985.78 327.62 658.16 64,866.67
221 64,866.67 985.78 324.33 661.45 64,205.22
222 64,205.22 985.78 321.03 664.76 63,540.47
223 63,540.47 985.78 317.70 668.08 62,872.39
224 62,872.39 985.78 314.36 671.42 62,200.97
225 62,200.97 985.78 311.00 674.78 61,526.19
226 61,526.19 985.78 307.63 678.15 60,848.04
227 60,848.04 985.78 304.24 681.54 60,166.50
228 60,166.50 985.78 300.83 684.95 59,481.56
229 59,481.56 985.78 297.41 688.37 58,793.18
230 58,793.18 985.78 293.97 691.82 58,101.37
231 58,101.37 985.78 290.51 695.27 57,406.09
232 57,406.09 985.78 287.03 698.75 56,707.34
233 56,707.34 985.78 283.54 702.24 56,005.10
234 56,005.10 985.78 280.03 705.76 55,299.34
235 55,299.34 985.78 276.50 709.28 54,590.06
236 54,590.06 985.78 272.95 712.83 53,877.23
237 53,877.23 985.78 269.39 716.40 53,160.83
238 53,160.83 985.78 265.80 719.98 52,440.85
239 52,440.85 985.78 262.20 723.58 51,717.28
240 51,717.28 985.78 258.59 727.19 50,990.08
241 50,990.08 985.78 254.95 730.83 50,259.25
242 50,259.25 985.78 251.30 734.48 49,524.77
243 49,524.77 985.78 247.62 738.16 48,786.61
244 48,786.61 985.78 243.93 741.85 48,044.76
245 48,044.76 985.78 240.22 745.56 47,299.20
246 47,299.20 985.78 236.50 749.29 46,549.92
247 46,549.92 985.78 232.75 753.03 45,796.89
248 45,796.89 985.78 228.98 756.80 45,040.09
249 45,040.09 985.78 225.20 760.58 44,279.51
250 44,279.51 985.78 221.40 764.38 43,515.13
251 43,515.13 985.78 217.58 768.21 42,746.92
252 42,746.92 985.78 213.73 772.05 41,974.87
253 41,974.87 985.78 209.87 775.91 41,198.97
254 41,198.97 985.78 205.99 779.79 40,419.18
255 40,419.18 985.78 202.10 783.69 39,635.50
256 39,635.50 985.78 198.18 787.60 38,847.89
257 38,847.89 985.78 194.24 791.54 38,056.35
258 38,056.35 985.78 190.28 795.50 37,260.85
259 37,260.85 985.78 186.30 799.48 36,461.37
260 36,461.37 985.78 182.31 803.47 35,657.90
261 35,657.90 985.78 178.29 807.49 34,850.41
262 34,850.41 985.78 174.25 811.53 34,038.88
263 34,038.88 985.78 170.19 815.59 33,223.29
264 33,223.29 985.78 166.12 819.66 32,403.63
265 32,403.63 985.78 162.02 823.76 31,579.86
266 31,579.86 985.78 157.90 827.88 30,751.98
267 30,751.98 985.78 153.76 832.02 29,919.96
268 29,919.96 985.78 149.60 836.18 29,083.78
269 29,083.78 985.78 145.42 840.36 28,243.42
270 28,243.42 985.78 141.22 844.56 27,398.85
271 27,398.85 985.78 136.99 848.79 26,550.07
272 26,550.07 985.78 132.75 853.03 25,697.04
273 25,697.04 985.78 128.49 857.30 24,839.74
274 24,839.74 985.78 124.20 861.58 23,978.16
275 23,978.16 985.78 119.89 865.89 23,112.27
276 23,112.27 985.78 115.56 870.22 22,242.05
277 22,242.05 985.78 111.21 874.57 21,367.48
278 21,367.48 985.78 106.84 878.94 20,488.53
279 20,488.53 985.78 102.44 883.34 19,605.19
280 19,605.19 985.78 98.03 887.76 18,717.44
281 18,717.44 985.78 93.59 892.19 17,825.25
282 17,825.25 985.78 89.13 896.65 16,928.59
283 16,928.59 985.78 84.64 901.14 16,027.45
284 16,027.45 985.78 80.14 905.64 15,121.81
285 15,121.81 985.78 75.61 910.17 14,211.64
286 14,211.64 985.78 71.06 914.72 13,296.91
287 13,296.91 985.78 66.48 919.30 12,377.62
288 12,377.62 985.78 61.89 923.89 11,453.72
289 11,453.72 985.78 57.27 928.51 10,525.21
290 10,525.21 985.78 52.63 933.16 9,592.06
291 9,592.06 985.78 47.96 937.82 8,654.24
292 8,654.24 985.78 43.27 942.51 7,711.73
293 7,711.73 985.78 38.56 947.22 6,764.50
294 6,764.50 985.78 33.82 951.96 5,812.54
295 5,812.54 985.78 29.06 956.72 4,855.83
296 4,855.83 985.78 24.28 961.50 3,894.32
297 3,894.32 985.78 19.47 966.31 2,928.01
298 2,928.01 985.78 14.64 971.14 1,956.87
299 1,956.87 985.78 9.78 976.00 980.88
300 980.88 985.78 4.90 980.88 (0.00)
Total 295,734.34 142,734.34 153,000.00