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
The total amount of principal that Dagny will pay during the first three months of the mortgage is closest to $1344.46 out of the monthly payment of such amount.
The calculation for the ascertaining of the amount of principal, an amortization method, will be followed for the first three months of the mortgage period.
The formula for the calculation of monthly payment on a mortgage value of $400,000 will be done as below after applying the given values from the above information.
[tex]\rm Monthly\ Payment= Rate\ x\ no.\ of\ Months\ x\ \dfrac{Total\ Value\ of\ Mortgage}{360}\\\\\rm Monthly\ Payment= \dfrac{0.054}{12}\ x\ 360\ x\ \dfrac{400000}{360}\\\\\rm Monthly\ Payment= \$1800[/tex]
The principal of the amount which is paid as interest will be 1800 USD. Out of this amount, the amount paid towards the principal for the first three months ascertained by amortization table as $1344.46.
Hence, the amount of principal paid by Dagny out of the monthly payment of mortgage value of $400000 will be $1344.46 for the first three months.
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