Assume Payment 1 totals 2100 1500 principal and 600 interest

Assume Payment 1 totals $2,100 ($1,500 principal and $600 interest expense), Payment 2 totals $2,000 ($1,500 principal and $500 interest expense), and the remaining principal balance after these two payments is $100,000. If the amortization schedule’s “Remaining Principal Balance” column after these payments amounts to $100,000, what is the balance in this column before these payments?

Solution

remaining balance before second payment = 100,000 + 1500 = 101,500

remaining balance before first payment = 101,500 + 1,500 = 103,000