Question

Ellucian Ethos ide x 88 Homepage - Wint x m Vretta x Vretta X Vretta 312/assignment/4623 Question 3 of 6 Kyle purchased a house for $375,000. He made a down payment of 10.00% of the value of the house and received a mortgage for the rest of the amount at 6.32% compounded semi-annually amortized over 25 years. The interest rate was fixed for a 4 year period. a. Calculate the monthly payment amount. $0.00 Round to the nearest cent b. Calculate the principal balance at the end of the 4 year term. $0.00 Round to the nearest cent C. Calculate the monthly payment amount if the mortgage was renewed for another 4 years at 6.72% compounded semi-annually? Round to the nearest cent Submit Question Next Question

Answer 1

	a	Calculation of Monthly Payment
		Semi annual interest rate=(6.32/2)%	0.0316
		Monthly Interest =r
		(1+r)^6=1.0316
	Rate	Monthly Interest =r=(1.0316^(1/6))-1	0.005198632
	Nper	Number of months=25*12	300
		Cost of house	$375,000
		Down payment =10%*375000	$37,500
	Pv	Loan amount =375000-37500	$337,500
	PMT	Monthly Payment	$2,223.96
		(Using PMT function of excel)
	b	Principal balance at end of 4 years
		Principal balance =Present Value of future payments for (25-4)=21 years
	Rate	Monthly Interest =r=(1.0316^(1/6))-1	0.005198632
	Nper	Number of months=21*12	252
	Pmt	Monthly Payment	$2,223.96
	PV	Principal Balance =Present Value=
		(Using PV function of excel)	$311,982.39
	c	Monthly payment at 6.72% interest
		Semi annual interest rate=(6.72/2)%	0.0336
		Monthly Interest =r
		(1+r)^6=1.0336
	Rate	Monthly Interest =r=(1.0336^(1/6))-1	0.005523172
	Nper	Number of months=21*12	252
	Pv	Principal Balance at end of year4	$311,982
	PMT	Monthly Payment	$2,296.20
		(Using PMT function of excel)
				LMbudlu Allyriment Number G14 X f =PMT(G9,610,-G13) E A B C D 0.0316 Rate Nper Calculation of Monthly Payment Semi annual interest rate=16.32/2)% Monthly Interest=r (1+r)^6=1.0316 Monthly Interest =r=(1.0316^(1/6))-1 Number of months=25*12 Cost of house Down payment =10%*375000 Loan amount =375000-37500 Monthly Payment (Using PMT function of excel) 0.0051986 300 $375,000 $37,500 $337,500 $2,223.96 Pv PMT Clipboard Font Alignment Number G24 X fac A B C G H I =PV(G20,621,-G22) D E Monthly Interest =r (1+r)^6=1.0316 Rate Monthly Interest =r=(1.0316^(1/6))-1 Nper Number of months=25*12 Cost of house Down payment =10%*375000 Pv Loan amount =375000-37500 PMT Monthly Payment (Using PMT function of excel) 0.005198632 300 $375,000 $37,500 $337,500 $2,223.96 b Principal balance at end of 4 years Rate Nper Pmt PV Principal balance =Present Value of future payments for (25-4)=21 years Monthly Interest =r=(1.0316^(1/6))-1 0.005198632 Number of months=21*12 252 Monthly Payment $2,223.96 Prencipal Balance =Present Value= (Using PV function of excel) $311,982.39 G34 fic =PMT(G31,632,-G33) D E A B C G H I J Rate Nper Pmt PV Principal balance =Present Value of future payments for (25-4)=21 years Monthly Interest =r=(1.0316^(1/6))-1 0.005198632 Number of months=21*12 252 Monthly Payment $2,223.96 Prencipal Balance =Present Value= (Using PV function of excel) $311,982.39 Monthly payment at 6.72% interest 0.0336 Rate Nper Pv PMT Semi annual interest rate=(6.72/2)% Monthly Interest =r (1+r)^6=1.0336 Monthly Interest =r=(1.0336^(1/6))-1 Number of months=21*12 Principal Balance at end of year4 Monthly Payment (Using PMT function of excel) 0.005523172 252 $311,982 $2,296.20 www