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?

Expert Solution

Since the first payment due in one month which means monthly payment is made.

Therefore,

Monthly payment would be $809.05

Cost	$ 1,60,000
Loan Amount	$ 1,28,000	=>$160000*80%
Interest	0.54%
Year	360
PMT	$ 809.05	=>PMT(B3,B4,-B2)

a) annual payment = $809.05*12 = $9708.56

b) First year Interest = $8277.88 and principal =$1430.69

c) Amount owned after third payment i.e $127650.98

Year	Opening Loan Balance	Mortgage Payment	*Interest Payment (opening Balance 0.54%)**	Principal Repayment (Annual Mortgage Payment - Interest)	Closing Loan Balance (Opening Balance - Principal Repayment)
1	$ 1,28,000.00	$ 809.05	$ 693.33	$ 115.71	$ 1,27,884.29
2	$ 1,27,884.29	$ 809.05	$ 692.71	$ 116.34	$ 1,27,767.95
3	$ 1,27,767.95	$ 809.05	$ 692.08	$ 116.97	$ 1,27,650.98
4	$ 1,27,650.98	$ 809.05	$ 691.44	$ 117.60	$ 1,27,533.37
5	$ 1,27,533.37	$ 809.05	$ 690.81	$ 118.24	$ 1,27,415.13
6	$ 1,27,415.13	$ 809.05	$ 690.17	$ 118.88	$ 1,27,296.25
7	$ 1,27,296.25	$ 809.05	$ 689.52	$ 119.53	$ 1,27,176.72
8	$ 1,27,176.72	$ 809.05	$ 688.87	$ 120.17	$ 1,27,056.55
9	$ 1,27,056.55	$ 809.05	$ 688.22	$ 120.82	$ 1,26,935.72
10	$ 1,26,935.72	$ 809.05	$ 687.57	$ 121.48	$ 1,26,814.25
11	$ 1,26,814.25	$ 809.05	$ 686.91	$ 122.14	$ 1,26,692.11
12	$ 1,26,692.11	$ 809.05	$ 686.25	$ 122.80	$ 1,26,569.31
		$ 9,708.56	$ 8,277.88	$ 1,430.69

jeff jeffy answered 1 year ago

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?

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...

You want to buy a $188,000 home. You plan to pay 20% as a down payment,...

You want to buy a $188,000 home. You plan to pay 20% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? $ b) What will your monthly payments be if the interest rate is 5%? $ c) What will your monthly payments be if the interest rate is 6%? $

You want to buy a $198,000 home. You plan to pay 20% as a down payment,...

You want to buy a $198,000 home. You plan to pay 20% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? $ b) What will your monthly payments be if the interest rate is 6%? $ c) What will your monthly payments be if the interest rate is 7%? $

You want to buy a $201,000 home. You plan to pay 20% as a down payment,...

You want to buy a $201,000 home. You plan to pay 20% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? b) What will your monthly payments be if the interest rate is 6%? c) What will your monthly payments be if the interest rate is 7%?

You want to buy a $240,000 home. You plan to pay 20% as a down payment,...

You want to buy a $240,000 home. You plan to pay 20% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? b) What will your monthly payments be if the interest rate is 6%? c) What will your monthly payments be if the interest rate is 7%?

You want to buy a $197,000 home. You plan to pay 20% as a down payment,...

You want to buy a $197,000 home. You plan to pay 20% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? $ b) What will your monthly payments be if the interest rate is 5%? $ c) What will your monthly payments be if the interest rate is 6%? $

You want to buy a $202,000 home. You plan to pay 20% as a down payment,...

You want to buy a $202,000 home. You plan to pay 20% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? $ b) What will your monthly payments be if the interest rate is 5%? $ c) What will your monthly payments be if the interest rate is 6%? $

Suppose you buy your first condo that costs $226,500 , you have 20% of it for...

Suppose you buy your first condo that costs $226,500 , you have 20% of it for a down payment, for the rest you will take a 30 years mortgage loan at a 3% nominal interest rate. a) What will your first year annual payment be? b) How much of this first payment will be interest and how much principal? c) How much will be the loan balance at the end of year 10? d) How much of the last payment...

You financed the purchase of a $300,000 apartment with a down payment in cash of 20%...

You financed the purchase of a $300,000 apartment with a down payment in cash of 20% of the purchase price. The remaining 80% is financed with a mortgage with a 1% monthly interest rate over the next 20 years. The mortgage is repaid with equal monthly installments. Compute the monthly installments on the mortgage. (5 points) What is the outstanding principal balance of the mortgage after 5 years (i.e., after 60 installments)? (5 points) Ten years later (after 120 installments),...

Question