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A fifteen-year adjustable-rate mortgage of $117,134.80 is being repaid with monthly payments of $988.45 based upon a nominal interest rate of 6% convertible monthly. Immediately after the 60th payment, the interest rate is increased to a nominal interest rate of 7.5% convertible monthly. The monthly payments remain at $988.45, and there will be an additional balloon payment at the end of the fifteen years to pay the outstanding loan balance. (a) Calculate the loan balance immediately after the 84th payment. (b) Calculate the amount of interest in the 84th payment. (c) Calculate the amount of the balloon payment.

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jepessoa

Answer:

Using an excel spreadsheet I prepared an amortization schedule. For the 61st payment, the interest rate is increased from 0.5% to 0.625% monthly.

(a) Calculate the loan balance immediately after the 84th payment.

  • $77,884.78

(b) Calculate the amount of interest in the 84th payment.

  • $489.90

(c) Calculate the amount of the balloon payment.

  • $12,168.43

As you can see, the interest amount for the 61st payment increases, while it had been decreasing previously.

lhmarianateixeira

In this exercise we have to use the knowledge of excel to calculate what is requested, so we have to:

A) [tex]\$77,884.78[/tex]

B) [tex]\$489.90[/tex]

C) [tex]\$12,168.43[/tex]

Using an excel spreadsheet I prepared an amortization schedule. For the 61st payment, the interest rate is increased from 0.5% to 0.625% monthly.

A) Calculate the loan balance immediately after the 84th payment, so that is:

[tex]\$988.45* 0.625\%=\$77,884.78[/tex]

B) Calculate the amount of interest in the 84th payment, we have that:

[tex]988-7.5\%= \$489.90[/tex]

C) Calculate the amount of the balloon payment.

[tex]\$117,134.80-\$77,884.78=$12,168.43[/tex]

See more about excel at brainly.com/question/12788694

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