Consider a 30-year mortgage with an interest rate of 10% compounded monthly and a monthly payment...
Consider a 30-year mortgage with an interest rate of 10%
compounded monthly and a monthly payment
of $850.
(1) Calculate the principal.
(2) How much of the principal is paid the first, 5th, 20th and last
year?
(3) How much interest is paid the first, 5th, 20th and last year
year?
(4) What is the total amount of money paid during the 30
years?
(5) What is the total amount of interest paid during the 30
years?
(6) What is the unpaid balance after 25 years?
(7) How much has to be deposited into a savings account with an
interest rate of 4% compounded
quarterly in order to pay the unpaid balance of the mortgage after
25 years?
(8) How much has to be deposited each quarter year in a fund with
an interest rate of 8% compounded
quarterly in order to cover the unpaid balance after 25 years?
Homework Answers
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Consider a 30-year mortgage with an interest rate of 10%
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