Question

You just acquired a home mortgage for 30 years in the amount of $184,500 at 4.65 percent interest, compounded monthly. How much of the first payment will be interest if the loan is repaid in equal monthly payments

Answer 1

Answer:

EMI=P*r * (1+r)^n/(1+r)^n-1

Where EMI= equal monthly installments

P=Principal amount

r=rate of interest

n=numer of periods

Explanation:

P=$184,500

r=4.65%/12=.3875%

n=30*12=360

EMI=$184,500*.3875%*(1+.3875%)^360/((1+.3875%)^360-1)

EMI=$951

Interest in first monthly installment=$715

Principal Amount in first monthly installment=$236