Question

Some rends e you that hey paid $28.384 down on a new house and are o pay S811 per month or 30 years n e est s 6.6% comp our ed mor h what was he selling price of the house? How much interest wil he pay n 3 years Selling price of the house:s(Round to two decimal places as needed.)

Answer 1

1)

Selling price of the house

$ 1,55,368.86

Working:

# 1

Present value of annuity of 1

=

(1-(1+i)^-n)/i

Where,

=

(1-(1+0.0055)^-360)/0.0055

i

6.6%/12

=

0.0055

=

156.5781

n

30*12

=

360

# 2

Present value of monthly cash flows

=

Cash flows * Present value of annuity of 1

=

$                 811

*

156.5781

=

$ 1,26,984.86

# 3

Down payment

$     28,384.00

Present value of monthly cash flows

$ 1,26,984.86

Present value of all cash flows

$ 1,55,368.86

2)

Interest paid

$ 1,64,975.14

Working:

Total amount paid

811

*

30

*

12

=

$ 2,91,960.00

Less:Present value of monthly payment

$ 1,26,984.86

Interest paid

$ 1,64,975.14