Question

A young couple buying their first home borrow $85,000 for 30 years at 7.5%, compounded monthly, and make payments of $594.33. After 3 years, they are able to make a one-time payment of $2,000 along with their 36th payment. (a) Find the unpaid balance immediately after they pay the extra $2,000 and their 36th payment. (Round your answer to the nearest cent.) (b) How many regular payments of $594.33 will amortize the unpaid balance from part (a)? Give the answer to one decimal point. payments (c) How much will the remaining debt be after the number of full payment periods in part (b) is made? (Round your answer to the nearest cent.) $ How much extra must be included with the last full payment to pay off the debt? (Round your answer to the nearest cent.) $ (d) How much will the couple pay over the life of the loan by paying the extra $2,000? (Round your answer to the nearest cent.) $ (e) How much will the couple save over the life of the loan by paying the extra $2,000? (Use your answer from part (b). Round your answer to the nearest cent.) $

Answer 1

1.
=FV(7.5%/12,12*3,594.33,-85000)-2000=80462.2044434802

2.
=NPER(7.5%/12,-594.33,80462.2044434802)=300.413030907159

3.
=FV(7.5%/12,300,594.33,-80462.2044434802)=244.398122780316

4.
=244.398122780316

5.
=594.33*12*3+2000+300*594.33+244.398122780316=201939.2781

6.
=594.33*12*30-594.33*300.4-2000-594.33*3*12=12026.188