Question

You have just made an offer on a new home and are seeking a mortgage. You need to borrow $ 591 comma 000. a. The bank offers a 30​-year mortgage with fixed monthly payments and an interest rate of 0.46 % per month. What is the amount of your monthly payment if you take this​ loan? b. Suppose you take the 30​-year mortgage described in part ​(a​). How much will you still owe on the mortgage after 15 ​years?

Answer 1

a)

Monthly payment, if the loan is availed - Calculations are done using Excel along with formulas for understanding:

b)

Amount owe after 15 years - Calculations are done using Excel along with formulas for understanding:

Therefore, amount owe on mortgage after 15 years is $411,057.87.

B4 PMT(B2,B3*12,-B1) $591,000 0.46% 1 Need to Borrow 2 Monthly Interest Rate 3 Total Tenure 4 Monthly Payment, if loan is taken 5 Hence, monthly payment on Mortgage is S3,363.05. 30 Years S3,363.05 B4 -PV(B3,B2*12,-B1) $3,363.05 1 Monthly Payment, if loan is taken 2 Total Tenure after 15 years (30 years 15 years) 3 Monthly Interest Rate 4 Amount still owe on mortgage after 15 years 15 years 0.46% $411,057.87