A grocery store sells for  $544,500  and a  5%  down payment is made. A  15 -year mortgage at  7%  is obtained. Compute an amortization schedule for the first  3  months. Round your answers to two decimal places, if necessary. The value of the mortgage is  $517,275  and the monthly payment is  $4650.30

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
icon
Related questions
Question

A grocery store sells for 

$544,500

 and a 

5%

 down payment is made. A 

15

-year mortgage at 

7%

 is obtained. Compute an amortization schedule for the first 

3

 months. Round your answers to two decimal places, if necessary.

The value of the mortgage is 

$517,275

 and the monthly payment is 

$4650.30

.

Part: 0 / 3
0 of 3 Parts Complete
 
Part 1 of 3
 
 
 

 

  
Payment number
  
  
Interest
  
  
Payment on Principal
  
  
Balance of Loan
  
1
$
$
$
 
 
 
 
 
 
 
Procedure for Computing an Amortization Schedule
Step 
1   
Find the interest for the first month. Use 
=IPrt
, where 
=t112
. Enter this value in a column labeled Interest.
Step 
2   
Subtract the interest from the monthly payment to get the amount paid on the principal. Enter this amount in a column labeled Payment on Principal.
Step 
3   
Subtract the amount of the payment on principal found in step 
2
 from the principal to get the balance of the loan. Enter this in a column labeled Balance of Loan.
Step 
4   
Repeat the steps using the amount of the balance found in step 
3
 for the new principal.
Expert Solution
Step 1

Borrowings are the liability that is used to finance the requirement of the funds. The borrower needs to pay annual payment against the borrowings.

steps

Step by step

Solved in 3 steps with 2 images

Blurred answer
Knowledge Booster
Mortgages
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education