Question 1200838: John has just purchased an apartment at a price of $5,000,000. He made a down-payment of
$2,000,000 and financed the remaining with a 30-year mortgage at APR 12%, compounded
monthly.
(a) Determine the size of the fixed month-end payments. (5 marks)
(b) Calculate the amount John still owes the bank right after the 120th payment was made.
(5 marks)
(c) Calculate the interest payment and the amount of principal paid in the 121st loan repayment.
(5 marks)
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! i used excel to solve this.
i first used a financial calculator to solve for the payment required.
the payment required at the end of each momth is equal to 30858.37791.
after the 120th payment is made, john still owes the bank $2,802,539.87.
the interest on the 121st payment is equal to $28,025.40
the principal on the 121st payment is equal to $2,832.98
this can be seen in the excerpts from the excel worksheet shown below:
the remaining balance at the end of the 120th payment is multiplied by .01 to get the interest at the end of the 121st payment.
that is then subtracted from the payment to get the principal at the end of the 121st payment.
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