Answer:
Given Data:
Selling price = $235,000
Down Payment = 20% of Selling Price
I = Interest Rate (yearly) = 7%
i = Interest Rate (monthly) = 0.583%
n = Term of Payment = 3 years = 360 months
Taxes (monthly) = $208.33
Insurance (monthly) = $109
Total Payment (monthly) = $1,568.10
Explanation:
As 20% of the selling price is already paid upfront. The principal amount can be obtained as follows:
P = Principal Amount = 235,000 - (235,000 * 20%)
P = Principal Amount = $188,000
Monthly Payment will be,
M = Monthly Payment = Total Payment - Tax - Insurance
M = Monthly Payment = 1568.10 - 208.33 -109
M = Monthly Payment = 1250.77 = $ 1251
Initial interest payment can be calculated by,
Interest (1st month) = Principal Amount * 
Interest = 188000 * 
Interest = $1097
Now let us calculate the amount of principal remaining (R) after 2 months.
![R\; =\; \frac{1}{i}\;*\;[M\;+\;(1\;+\;i)^x\;*\;(P*i-M)]\\\\where\;=\;2\;(months),\\\\\therefore R\; =\; [1251\;+\;(1\;+\;0.00583)^2\;*\;(188000*0.00583-1251)]\;*\;\frac{1}{0.00583}\\\\\\](https://tex.z-dn.net/?f=R%5C%3B%20%3D%5C%3B%20%5Cfrac%7B1%7D%7Bi%7D%5C%3B%2A%5C%3B%5BM%5C%3B%2B%5C%3B%281%5C%3B%2B%5C%3Bi%29%5Ex%5C%3B%2A%5C%3B%28P%2Ai-M%29%5D%5C%5C%5C%5Cwhere%5C%3B%3D%5C%3B2%5C%3B%28months%29%2C%5C%5C%5C%5C%5Ctherefore%20R%5C%3B%20%3D%5C%3B%20%5B1251%5C%3B%2B%5C%3B%281%5C%3B%2B%5C%3B0.00583%29%5E2%5C%3B%2A%5C%3B%28188000%2A0.00583-1251%29%5D%5C%3B%2A%5C%3B%5Cfrac%7B1%7D%7B0.00583%7D%5C%5C%5C%5C%5C%5C)
R = $187690.43