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PLANTERS DEVELOPMENT

BANK
(Housing loan)
Group 4 BBM 112/ BGC/ 09:30-10:30/ MWF
Housing Loan as defined:

A sum of money borrowed from a financial


institution or bank to purchase a house. Home
loans consist of an adjustable or fixed interest rate
and payment terms.
Parts of The Note
Problem

Mrs. Aguilar wrote a 25 year 12% interest


bearing note for 227,850.00 on November 1, 1993.
If the loan is to be paid back in monthly
installments starting December 1,1993, calculate:
a.) the amortization factor and the monthly
amortization
b.) future value of an ordinary annuity
c.) the total amount to be paid back, and the total
interest paid
Given:
A= 227,850.00
j= 12%
m=12
t= 25 years
i=0.01
n=300
a.) the amortization factor
a.) the monthly amortization (R)
First Year of Amortization
b.) future value of an ordinary annuity (S)
c.1) the total amount to be paid back
c.2) total interest to be paid
LOAN SUMMARY
Initially, a large portion of each payment is devoted to interest. As the loan
matures, larger portions go towards paying down the principal. Balance on
Principal Remaining also decreases until it reaches Php 0 or when the loan is
already paid in full.