Answer (a):
Cost of house = $400,000
Down payment = $60,000
Loan amount = 400000 - 60,000 = $340,000
Annual interest = 5.40%
Monthly interest = 5.40% / 12 = 0.45%
Number of payments = 20 * 12 = 240
Monthly Payment = PMT (rate, nper, pv, fv, type) = PMT(0.45%, 240, -340000, 0, 0) = $2319.6554
Monthly Payment = $2319.66
Answer (b):
Amount Taylor's owe after 15 years = Present value remaining monthly payments
Remaining number of monthly payments = (20 - 15) *12 = 60
Amount Taylor's owe after 15 years = PV (rate, nper, pmt, fv, type) = PV (0.45%, 60, -2319.6554, 0, 0) = $121,734.48
Amount Taylor's owe after 15 years = $121,734.48
Answer (c)
PMT = $2,500
Number of months required = NPER (rate, pmt, pv, fv, type) = NPER(0.45%, 2500, -340000, 0, 0) = 210.862 months
Number of years required = 210.862 / 12 = 17.57 Years
Number of years required = 17.57 Years
Answer (d):
The first 10 rows of amortization schedule is as follows:
The above table with 'show formula' is as below:
Answer (e):
Total Interest paid in first 10 months = $15,138.16
Working:
Please refer to amortization table in answer d above. The total of first 10 months expense = $15,138.16
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