Paying principal

For the context of this case study, today's date is September 21, 2021. Generally, trades take time as buyers review the loan data, perform financial analysis and contracts are signed. Therefore, we'll target October 13, 2021 as the settlement date. The settlement date is the day the transaction happens: everything is finalized and the lender sells their loans to the financial institutions.

Since the trade settles in the next month, some borrowers will have to make payments on their mortgages for October. We'll need to do some math to figure out what the scheduled principal balance will be for each loan next month.

We can do this with the PPMT() function, which will find the principal portion of the payment, and subtracting it from the current balance of the loan. Review the syntax for PPMT() here.

If you have lost progress, close any open workbooks and load 1_4_ready_yet_solution.pbix from the Exercises folder on the Desktop.