Question

3. In 2005, Justin buys a condominium that sells for $195,000. The bank is requiring a minimum dow payment of 15%. He obtains a 30-year mortgage at 4.2%/year interest. a) What was his down payment? b) What is their monthly payments? c) If he pays the minimum payment each month, how much interest does he end up paying over the life of the mortgage? d) He decides to pay an extra $150 each month. How long will it take him to pay off the loan? e) How much money would he end up saving in interest by paying the extra $150/month?

Answer 1

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PV, FV, ANNUITY (Autosaved) - Microsoft Excel (Product Activation Failed) Review View Add-Ins File Home Insert Page Layout Formulas Data - 2x % Cut Calibri Dr General Wrap Text Merge & Center - BI U $ % , :.: Insert Delete Format Cell Styles E Copy Paste Format Painter Clipboard P780 J Conditional Format Formatting as Table Styles -11AA = = = D- DA Font fax K Find & Select Σ AutoSum : A Fill Sort & Clear Filter Editing Alignment Number Cells O P Q R 780 781 782 783 784 785 786 787 788 789 PURCHASE OF HOUSE ANSWER 1 DOWN PAYMENT (15% X 195000] LOAN 195000 - 29250 YEARS RATE PERIODS IN A YEAR MONTHLY RATE NO OF MONTHS ANSWER 2 MONTHLY PAYMENT 195000 29250 165750 30 4.125% 12 0.34375000% 360 803.31 (=PMT(N787,1788,-N783)] 790 TOTAL AMOUNT PAID IN 30 YEARS LESS : LOAN AMOUNT TOTAL INTEREST PAID 289190.50 [=N789*N788] 165750.00 123440.50 [=N791-N792] ANSWER 3 791 792 793 794 795 796 797 PMT 803.31 + 150 = NO OF MONTHS TO PAY OFF THE LOAN ANSWER 4 953.31 265.32 [=NPER(N787,-N795,N783) 265 MONTHS 798 H N CAP STRU VALUE profit margin loan with points LOCK BOX DILUTION DOLLAR COST AVG EXPONPER APR CPI ear FVA < > LOAN OPTIONSpv, fv, annuity ferences 53 130% Rea _ 0 + pva 52 BO m * S. Rag ENG 01-11-2019

PV, FV, ANNUITY (Autosaved) - Microsoft Excel (Product Activation Failed) Review View Add-Ins File Home Insert Page Layout Formulas Data - 2x % Cut Calibri Dr General Wrap Text Merge & Center - BI U $ % , :.: Insert Delete Format Conditional Format Formatting as Table Styles Cell Styles -11AA = = = D- DA Font fax K Σ AutoSum : A Fill Sort & Clear Filter Editing Find & Select Alignment Number Cells - Q R E Copy Paste Format Painter Clipboard P816 J 798 799 800 801 802 TOTAL AMOUNT PAID IN 30 YEARS LESS : LOAN AMOUNT TOTAL INTEREST PAID 252935.86 [=N795*N796] 165750.00 87185.86 [=N799-N800] 803 ANSWER 5 SAVINGS IN INTEREST 36254.63 (=N793-1801] 804 805 806 807 808 809 810 811 812 813 814 815 816 N Rea H CAP STRU VALUE profit margin loan with points LOAN OPTIONSpv, fv, annuity ferences LOCK BOX DILUTION DOLLAR COST AVG EXPONPER APR CPI ear FVA pva 52 53 < > BO 130% _ 0 RADORA * 1 = k = 4 4 l 7 ENG 01-2018 +