Question

You are considering buying a condominium located in Sandy Hill neighborhood. The condominium is listed for $350,000. Assume that the (quoted) mortgage rate is 3.0% and that you just have the 10% (of the price of the condominium) needed for the down payment. Assuming that the 3% mortgage rate is fixed for a period of 10 years. What will your monthly mortgage payment be if you want to pay your mortgage in 10 years?  

Question 1 options:

	$1,343.64
	$5,419.22
	$3,041.66
	$4,779.63
	Not enough information

Answer 1

G H $ 350,000 120 months $ 315,000 0.25% per month 1 cost of condominium 2 No.of period, nper (No. of years *12) Amount of loan, pv 3 (cost of condominium*(1 - Down payment %)) 4 Interest rate ,Rate (rate/12) 5 6 Using excel function for periodic payments- 7 PMT(rate, nper,pv,fv, type) 8 $ 3,041.66 9 10 Where, 11 Rate = Periodic Interest rate 12 Nper = No. of periods 13 PV=Amount of loan 14 FV = Future value of loan Type=0 if the amount paid at the end of period, 1 15 if paid at the beginning. 16 17 Hence, the ans is $3,041.66

I G 350000 =10*12 months 1 cost of condominium 2 No.of period, nper (No. of years *12) Amount of loan, PV 3 (cost of condominium*(1 - Down payment %)) 4 Interest rate ,Rate (rate/12) =H1*(1-10%) =3%/12 per month 5 6 Using excel function for periodic payments- 7 PMT(rate,nper,pv,fv, type) 8 =PMT(H4,H2,-H3,0,0) 9 10 Where, 11 Rate = Periodic Interest rate 12 Nper = No. of periods 13 PV= Amount of loan 14 FV = Future value of loan Type=0 if the amount paid at the end of period, 1 15 if paid at the beginning. 16 17 Hence, the ans is $3,041.66 18
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