Answer :
The value of the mortgage (the real amount to be financed) is A = $391,500.
The annual interest rate is r = 7%. We must convert it to montly decimal rate:
r = 7 / 12 / 100 = 0.005833
Note: The decimals will be kept in our calculator. Only two decimal places will be shown in the results.
The monthly payment is R = $3,034.13 which includes interest and principal.
For the first month, the loan has not been paid upon, so the interest for this period is:
I = $391,500 * 0.005833 = $2,283.75
From the monthly payment, the portion that goes to pay the principal is:
$3,034.13 - $2,283.75 = $750.38
So the new balance of the loan is:
$391,500 - $750.38 = $390,749.62
Thus, for payment 1:
Interest - Payment on Principal - Balance of Loan
$2,283.75 - $750.38 - $390,749.62
Repeating the calcuations for the second payment:
The interest for this period is:
I = $390,749.62 * 0.005833 = $2,279.37
From the monthly payment, the portion that goes to pay the principal is:
$3,034.13 - $2,279.37 = $754.76
So the new balance of the loan is:
$390,749.62 - $754.76 = 389,994.86
The table is updated as follows:
Interest - Payment on Principal - Balance of Loan
$2,283.75 - $750.38 - $390,749.62
$2,279.37 - $754.76 - $389,994.86
For the third month:
The interest for this period is:
I = $389,994.86 * 0.005833 = $2,274.97
From the monthly payment, the portion that goes to pay the principal is:
$3,034.13 - $2,274.97 = $759.16
So the new balance of the loan is:
$389,994.86 - $759.16 = $389,235.70
The final updated table is:
Interest - Payment on Principal - Balance of Loan
$2,283.75 - $750.38 - $390,749.62
$2,279.37 - $754.76 - $389,994.86
$2,274.97 - $759.16 - $389,235.70