First we have to calculate the monthly payment on the mortgage which is calculated as =PMT(rate,nper,pv) in excel
Monthly payment = PMT(0.054/12,30*12,400000) = $2,246.12
To calculate the amount of principal for the first three months, we construct the amortization table as shown below:
Month Payment Interest Principal Outstanding
0 400000
1 $2,246.12 1800 $446.12 $3,99,553.88
2 $2,246.12 1797.992446 $448.13 $3,99,105.75
3 $2,246.12 1795.975857 $450.15 $3,98,655.60
Total Principal $1,344.40
The total amount of principal that dagny will pay during the first three months of her mortgage is closest to: $1,344.40
