Question

A $234,000 home is purchased with a 10% down payment, and a 30-year loan for the remaining amount. a. How much is the loan amount going to be? $S b. What are the monthly payments if the interest rate is 6%? $ C. What are the monthly payments if the interest rate is 7%?$ Get help: Videdo

Answer 1

a

Loan amount = price*(1-down%) = 234000*(1-0.1)=210600

b

PVordinary Annuity

PVOrdinary Annuity = C*[(1-(1+i/100)^(-n))/(i/100)]

C = Cash flow per period

i = interest rate

n = number of payments

210600= Cash Flow*((1-(1+ 6/1200)^(-30*12))/(6/1200))

Cash Flow = 1262.65

c

PVOrdinary Annuity = C*[(1-(1+i/100)^(-n))/(i/100)]

C = Cash flow per period

i = interest rate

n = number of payments

210600= Cash Flow*((1-(1+ 7/1200)^(-30*12))/(7/1200))

Cash Flow = 1401.13