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You want to buy a $229,000 home. You plan to pay 15% as a down payment, and take out a 30 year fixed loan for the rest. Round

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Answer #1

Loan amount = Present value of future monthly payments = monthly payment * [1-(1+i)^-n]/i

i = interest rate per period

n = number of periods

=>

a)

loan amount = 229000 * (1-0.15) = 194650

b)

monthly payment * [1-(1+0.061/12)^-360]/(0.061/12) = 194650

=>

monthly payment = 1179.57

c)

monthly payment * [1-(1+0.071/12)^-360]/(0.071/12) = 194650

=>

monthly payment = 1308.11

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