Help With Q Please (1 Viewer)

[Kimmi_R]

i was trying to help some onewith this question but it didnt seem to make any sense to me. if anyone can help please do so asap. thanks.

Mr and Mrs. Buckey borrow $130 000.00 to purchase a home. The interest rate is 8% p.a. and ower a 20 year term the monthly repayment is $1087.37

complete table below

Principle 1st month=$130000
Interest 1st Month=$866.67
Balance end 1st month=$129779.29

therefore principle for 2nd month is $129779.29

the table wouldnt post right, but they want you to show the principle, interest and balance for up to 12 months. it doesnt seem to add up to us so if anyone knows what to do please post asap. thanks heaps!

 

[lilmzqt]

ok well its simple.

principal is the amount owing at the begining of each month (the balance of the previous month.

the interest rate is 8/12 = 0.666667 (repayments are monthly and the interest in p.a. so it has to be changed to suit.)
so to FIND the interest to do principal x 0.666667%

balance is how much is still owing on the loan. to find this you add the principal to the interest then subtract the monthly repayment amount from that amount. so for the 2nd month it would be:

Principal: $129779.29

Interest: $865.20

Balance: $129557.12

hope that helps