Question

In: Finance

you are taking out a $100,000 mortgage loan to be repaid over 25 years in 300...

you are taking out a $100,000 mortgage loan to be repaid over 25 years in 300 monthly payments.

a. if the interest rate is 16% per year, what is the amount of the monthly payment?

b. if you can only afford to pay $1000 per month, how large a loan can you take?

c. if you can afford to pay $1500 per month and need to borrow $100,000, how many months would it take to pay the mortgage?

d. if you can pay $1,500 per month, need to borrow $100,000, and want a 25-year mortgage, what is the highest interest rate you can pay?

Expert Solution

a.

Monthly Payment mortgage is calculated in excel and screen shot provided below:

Monthly Payment mortgage is $1,358.89.

b.

if you afford only $1,000 then maximum loan you can afford is calculated in excel and screen shot provided below:

if you afford only $1,000 then maximum loan you can afford is $73,589.53.

c.

Number of months it will take is calculated in excel and screen shot provided below:

Number of months it will take is 166 months.

d.

Maximum interest rate is calculated in excel and screen shot provided below:

Maximum interest rate is 17.78%.

jeff jeffy answered 2 years ago

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