Question

You won the lottery and plan to buy your parents the coastal home they've always wanted. You pick out a $500,000 villa on the water, and make a $60,000 down-payment in cash. You take out a 30 year mortgage of $440,000 at 7.7% per year, and begin making the monthly mortgage payments.

After two years, your parents decide the house is too big and want to move.  

a) What is the unpaid balance on the mortgage after making two years of payments? (In other words, how much do you still owe on the house?)

b) How much total interest did you pay over two years?

Answer 1

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PV, FV, ANNUITY (Autosaved) Microsoft Excel (Product Activation Failed) Page Layout Formulas File Home Insert Data Review View Add-Ins Z AutoSum Cut Wrap Text Calibri 11 General E Copy Fill B IU Merge & Center Paste 000 Conditional Format Cell Insert Delete Format Sort & Find & % Format Painter Formatting as Table Styles Clear Filter Select Alignment Clipboard Font Number Styles Cells Editing 0808 L O Q R 808 809 LOAN 440000 810 YEARS 30 811 RATE 7.700% 812 PERIODS IN A YEAR 12 0.641667% 813 MONTHLY RATE 814 NO OF MONTHS 360 3137.02 PMT(N813,N814,-N809)] 815 MONTHLY PAYMENT 816 817 BALANCE AFTER 2 YEARS YEARS LEFT 818 28 819 NO OF MONTHS LEFT 336 ANSWER a LOAN BALANCE after 2 years 431888.81 PV(N813,N819,-N815)] 820 821 8111.19 N809-N820] 822 PRINCIPAL REPAID= 823 75288.59 N815*24] 824 TOTAL AMOUNT PAID IN 2 YEARS 825 LESS PRINCIPAL REPAID 8111.19 ANSWER b 67177.41 [EN824-N825] 826 TOTAL INTEREST PAID IN 2 YEARS LOAN OPTIONS DOLLAR COST AVG pv, fv, annuity loan with points LOCK BOXDILUTION ear FVA pva profit margin CAP STRU VALUE EXPO NPER APR CPI s2 erences 130% W 07:49 TENG 01-11-2019