Question

so we are all on the same page do not found up that number, but used the mee r (6) You have found the house of your dreams and contract to purchase it for $100,000. You use 20% of your own money and take out a bank loan for the remaining 80%. The loan is for 30 years at 7.5% interest and is required to be paid back in monthly installments. (a) What will you monthly payment be? (b) What would your monthly payment be if the interest rate was 11.5%?

Answer 1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

A В 1 $100,000.00 Cost of House 2 20% Down payment Loan Amount Term (years) No. of monthly repayment $80,000.00 4 30 6 360 7 a. Annual interest rate Monthly interest rate Monthly Payment 8 7.50% 0.6250% 9 $559.37 10 11 12 b. Annual interest rate Monthly interest rate Monthly Payment 11.50% 13 0.9583% $792.23 14 15 16 17 st LC LO

Cell reference -

A В 1 Cost of House Down payment Loan Amount Term (years) No. of monthly repaymentC5*12 2 100000 0.2 ЕC2*(1-сз) 30 6 7 Annual interest rate Monthly interest rate Monthly Payment 0.075 8 а. ЕC8/12 9 ЕРМТ(С9,С6,-С4,0) 10 11 Annual interest rate Monthly interest rate Monthly Payment 0.115 12 b. C12/12 13 ЕРMT(С13,С6,-С4,0) 14 15 16 LO LC

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.