Question

S e wiastoep 05032 -11 points HarMathAp 12 6.5.040. My Notes This problem is a complex financial problem that requires several skills, perhaps some from previous sections. Ask Your Tea Clark and Lana take a 30-year home mortgage of $128,000 at 7.2%, compounded monthly. They make their regular monthly payments for 5 years, then decide to pay $1100 per month (a) Find their regular monthly payment. (Round your answer to the nearest cent.) (6) Find the unpaid balance when they begin paying the $1100. (Round your answer to the nearest cent.) (c) How many payments of $1100 will it take to pay off the loan? Give the answer correct to two decimal places. monthly payments (d) Use your answer to part (c) to find how much interest they save by paying the loan this way. (Round your answer to the nearest cent.) Need Help?

Answer 1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

A В C 1 $128,000.00 2 Loan Amount Term in years Annual interest rate Monthy interest rate 30 4 7.20% 0.60% 6 7 (a) No. of monthly payment 360 $868.85 Regular monthly payment 8 $120,742.44 10 (b) Unpaid balance after 5 years 11 12 (c) Monthly payments No. of monthly payment $1,100.00 179.65 13 14 15 (d) Total Interest in case regular payment Total Interest in new case $184,785.61 $121,747.21 16 17 $63,038.40 Total Interest saved 18 19 20 21 ר CC

Cell reference -

A В с 1 128000 2 Loan Amount Term in years 3 30 Annual interest rate 0.072 4 -C4/ 12 Monthy interest rate 6 7 (a) No. of monthly payment |ЕС3*12 -РMT(С5, С7,-С2,0) Regular monthly payment 8 =PV(C5,300,-C8,,0) Unpaid balance after 5 years 10 (b) 11 Monthly payments No. of monthly payment 12 (c) 1100 ENPER(C5,-C12,с10,0) 13 14 Total Interest in case regular payment Total Interest in new case 15 (d) C8*C7-C2 C12*C13+C8*60-C2 16 17 -C15-C16 Total Interest saved 18 19 20 1 st LC

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.