A couple purchasing a home budget $1,200 per month for their loan payment. If they have...
A couple purchasing a home budget $1,200 per month for their loan payment. If they have $17,000 available for a down payment and are considering a 25-year loan, how much can they spend on the home at each of the f
(a) 6.6% compounded monthly
(b) 7.8% compounded monthly
Homework Answers
a.
Calculating Present Value of Payment,
Using TVM calculation,
PV = [FV = 0, PMT = 1,200, N = 300, I 0.066/12]
PV = $176,090.16
Loan Amount = 17,000 + 176,090.16 = $193,090.16
b.
Calculating Present Value of Payment,
Using TVM calculation,
PV = [FV = 0, PMT = 1,200, N = 300, I 0.078/12]
PV = $158,183.14
Loan Amount = 17,000 + 158,183.14 = $175,183.14
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