Question

1. You want to buy a $249,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan for the rest.

a) How much is the loan amount going to be?

$

b) What will your monthly payments be if the interest rate is 6%?

$

c) What will your monthly payments be if the interest rate is 7%?

$

2. You can afford a $1150 per month mortgage payment. You've found a 30 year loan at 8% interest.

a) How big of a loan can you afford?

$

b) How much total money will you pay the loan company?

$

c) How much of that money is interest?

$

Answer 1

Home buy price = $249,000

Down-payment = 5%

a). Loan Amount = Home Price*(1-Down-payment)

= $249,000*(1-0.05)

= $236,550

b). Calculating Monthly Payment if Interest arte is 6%:-

Where, P = Loan amount = $236,550

r = Periodic Interest rate= 6%/12 = 0.5%

n= no of periods = 30 years*12 = 360

Monthly Payment = $1418.24

c). Calculating Monthly Payment if Interest rate is 7%:-

Where, P = Loan amount = $236,550

r = Periodic Interest rate= 7%/12 = 0.58333%

n= no of periods = 30 years*12 = 360

Monthly Payment = $1573.77

Note - As HOMEWORKLIB Guideliness, I'm only allowed to answer 1 question per answer.

If you need any clarification, you can ask in comments.     

If you like my answer, then please up-vote as it will be motivating