CNBC.com reported mortgage applications increased 9.9% due to a decrease in the rate on 30-year fixed rate mortgages to 4.03%. Dennis Natali wants to purchase a vacation home for $300,000 with 20% down. Calculate his monthly payment for a 22-year mortgage at 7.5%. Calculate total interest. (Use Table 15.1.) (Do not round intermediate calculations. Round your final answers to the nearest cent.)
ANSWER
monthly payment formula= P*r*(1+r)^n / [(1+r)^n-1]
here,
P = 300,000 *(1-0.20 down) =>240,000.
r =7.5% per annum => 7.5*1/12=>0.625%=>0.00625
n=22 years * 12
=>264.
=>240,000*0.00625*(1.00625)^264/ [(1.00625)^264-1]
=>1,500 *5.180311212/[5.180311212-1]
=>7,770.46681928/ 4.180311212
=>$1,858.8249.
total interest paid = (monthly payment *number of payments) - loan amount
=> (1,858.8249*264) - 240,000
=>490,729.7736-240,000
=>$250,729.7736.
monthly payment | 1,858.8249 |
total interest | 250,729.7736 |
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