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In: Finance

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.

(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?

Solutions

Expert Solution

Original loan $96,858.20
5 Interest paid = Number of payments
*Payment - Originalamount		 $209,141.80
6 Principal paid after 25 years -56852.6333
Balance unpaid $40,005.56
7 Amount to deposit in savings $234.66
8 Amount to deposit in fund $128.13

Workings

jeff jeffy answered 7 months ago
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