Homework Sourse31 You plan to purchase a 150000 house using a 15year mortga
3-1\\ You plan to purchase a $150,000 house using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is 5 percent. You will make a down payment of 15 percent of the purchase price. a. Calculate your monthly payments on this mortgage. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Monthly payment $ b. Calculate the amount of interest and, separately, principal paid in the 25th payment. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) Amount of interest $ Amount of principal $ c. Calculate the amount of interest and, separately, principal paid in the 140th payment. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) Amount of interest $ Amount of principal $ d. Calculate the amount of interest paid over the life of this mortgage. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Amount of interest paid $
Solution
a
monthly payment
Loan amount = 150000* 85% = 127500
b
c
d
*Hope the above explanation helps, please comment if further explanation is required. Your rating is appreciated*
| Monthly payment | = | [P * R * (1+R)^N ] / [(1+R)^N -1] | |
| Using the formula: | |||
| Principle | P | 1,27,500.00 | |
| Rate of interest per period: | |||
| Annual rate of interest | 5.000% | ||
| Frequency of payment | = | Once in 1 month period | |
| Numer of payments in a year | = | 12/1 = | 12 |
| Rate of interest per period | R | 0.05 /12 = | 0.4167% |
| Total number of payments: | |||
| Frequency of payment | = | Once in 1 month period | |
| Number of years of loan repayment | = | 15 | |
| Total number of payments | N | 15*12 = | 180 |
| Period payment using the formula | = | [ 127500*0.00417*(1+0.00417)^180] / [(1+0.00417 ^180 -1] | |
| Monthly payment | = | 1,008.26 |
