Question

Intro You just took out a 15-year traditional fixed-rate mortgage for $500,000 to buy a house. The interest rate is 2.4% (APR) and you have to make payments monthly. Attempt 1/10 for 10 pts. Part 1 What is your monthly payment? No decima Submit Part 2 Attempt 1/10 for 10 pts. How much of your first monthly payment goes towards paying down the outstanding balance (in $)? No decima Submit Part 3 Attempt 1/10 for 10 pts. What is the outstanding balance after 1 year if you have made all 12 payments on time? No decima

Answer 1

Part 1)

Monthly payment [Pxrx(1+r)^n]+[(1+r)^n-1] Here, 1 Interest rate per annum 2.4% 2 Number of years 15 3 Number of compoundings per per annum 12 1:3 Interest rate per period (r) 2x3 Number of periods (n) 0.2% 180 Loan amount (P) $ 500,000 Monthly payment 3310 (500000x0.2%x(1+0.2%)^180)-((1+0.2%)^180-1)

Part 2)

Principal in first payment:

= 3310-500000*0.2%

= 2310

Part 3)

A В 17 Unpaid balance PV*(1+r)An-P*((1+r)^n-1))/r| 129890 Unpaid balance 18 (160000* (1+(4%/12))^84)-P MT(4%/12,25*12,-160000,0)* (1+(4%/12))^84-1)/(4%/12) 19

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