You are buying your first condo for $220,000 and are making a $20,000 down payment. You...

You are buying your first condo for $220,000 and are making a $20,000 down payment. You have arranged to finance the remaining amount with a 30-year monthly payment amortized mortgage at a 5.75% nominal interest rate. What will your monthly payments be?

a. $1,167.15

b. $1,900.88

c. $1,200.93

d. $1,962.70

e. $1,324.02

f. $2,100.04

What is the estimated payoff on the mortgage question above after you have paid for 10 years? Show how you obtained the mortgage balance using Excel and the balance.

What is the first 12 months mortgage interest that you can deduct from your taxes according to IRS? Show how you obtained the mortgage interest deduction using Excel and the answer.

Solutions

Expert Solution

After down payment of $20,000 loan amount= $220000-20000 = $200,000

Monthly payment= $1,167.15 using the PV function of Excel as follows:

The answer is option 1 given.

Estimated pay off after paying for 10 years= $166,240.30 calculated as the present value of future payments, using the PV function of Excel (as given above).

Interest for the first 12 months= $ 11,432.90 calculated using the CUMIPMT function of Excel (as given above).

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Suppose you are buying your first condo for $160,000, and you will make a $15,000 down...

Suppose you are buying your first condo for $160,000, and you will make a $15,000 down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at a 4.5% nominal interest rate, with the first payment due in one month. What will your monthly payments be?

Judy recently purchased her first home for $220,000. She made a down payment of $20,000, and...

Judy recently purchased her first home for $220,000. She made a down payment of $20,000, and financed the balance over 15 years, at 6% interest. How much is her principal and interest payment each month?

YOUR first condo cost you $160,000, and you pay 20% cash as a down payment, for...

YOUR first condo cost you $160,000, and you pay 20% cash as a down payment, for the remainder you arrange a 30-year mortgage at a 6.5% nominal interest rate, with the first payment due in one month. a ) What will your annual payments be? b) How much of this payment will be interest and how much principal the first year? c) How much would you still owe after the third payment?

Suppose you are buying the first house for $500,000 with 20% down payment. You have arranged...

Suppose you are buying the first house for $500,000 with 20% down payment. You have arranged to finance the remaining amount with a 15-year, monthly payment, amortized mortgage at nominal annual rate of 3.6%. What is remaining balance after 10 years with 120 monthly payments? $180,68.90 $79,777.39 $167,123.45 $157,881.37 Which of the following statements is/are INCORRECT? Unlimited liability and limited life are two key advantages of the corporate form over other forms of busiess organizations. Limited liability is an advantage...

john is considering buying a new car for $20,000 with $4,000 down payment and a 3-year...

john is considering buying a new car for $20,000 with $4,000 down payment and a 3-year car loan with APR 3.4%. The car's resale value will be $12,000 at the end of 3 years. The dealership also offers a lease option with $1000 security deposit which will be refunded at the end of 3-year lease. The lease monthly payment will be $300 per month and John could also invest his deposit at 1% in a saving account. Should John choose...

Suppose that you want to purchase a home for $220,000 using a down payment as described...

Suppose that you want to purchase a home for $220,000 using a down payment as described below and you finance the rest of the purchase by taking out a 15-year mortgage at 4.5% interest compounded monthly. The amount of the down payment is $56,083. Construct an amortization table for the entire length of the loan making sure to include columns for the payment number, the amount of the payment, the amount of each payment that goes towards the principal, the amount...

Kari is purchasing a home for $220,000. The down payment is 25% and the balance will...

Kari is purchasing a home for $220,000. The down payment is 25% and the balance will be financed with a year mortgage at 8% and 4 discount points. Kari made a deposit of $30,000 (applied to the doen payment) when the sales contract was signed. Kari also has three expenses: credit report, $70; appraisal fee, $110; title insurance premium, 1% of amount financed; title search, $200; and attorney's fees, $500. Find the closing costs (in $).

You borrow $20,000 from your parents to make a house down payment at a mutually agreedupon...

You borrow $20,000 from your parents to make a house down payment at a mutually agreedupon annual interest rate of 5%, and a payback period of 5 years (direct reduction loan). What will be your annual, or monthly, payment amounts?

Billy McMahon is interested in buying a waterfront condo and has saved $100,000 for the down...

Billy McMahon is interested in buying a waterfront condo and has saved $100,000 for the down payment. His plans call for making additional monthly deposits into an investment account over the next 36 months. Billy McMahon wants to make the purchase 48 months from today and wants to have $180,000 saved up for the down payment. A) What is the amount of each of the additional payments he must make for his plan to work out? Assume Billy can earn...

Billy McMahon is interested in buying a waterfront condo and has saved $100,000 for the down...

Billy McMahon is interested in buying a waterfront condo and has saved $100,000 for the down payment. His plans call for making additional monthly deposits into an investment account over the next 36 months. Billy McMahon wants to make the purchase 48 months from today and wants to have $180,000 saved up for the down payment. a. What is the amount of each of the additional payments he must make for his plan to work out? Assume Billy can earn...

Subjects