Question
In: Finance
The next four questions are related to your purchase of your first home for $600,000. You...
The next four questions are related to your purchase of your first home for $600,000. You have just purchased the house and have put a 20% down payment, and will borrow the remaining amount. The 15-year fixed rate loan has an Annual Percentage Rate (APR) of 3.875%. You will make monthly payments for the life of the loan. You have made payments for the first year of the loan. How much have you paid in interest for the first year of the loan? Select one: a. $19,000 to $21,000 b. Less than $15,000 c. More than $21,000 d. $17,000 to $19,000 e. $15,000 to $17,000
Solutions
Expert Solution
Monthly EMI formula=P*monthly interest*((1+monthly interest)^n)/((1+monthly interest)^n)-1
P=$480,000 (80%*$600,000)
EMI=480,000*(3.875%/12)*((1+(3.875%/12))^180)/((1+(3.875%/12)^180)-1
EMI=3520.51
Sum of interest
paymets=$18,175.48 which lies in between $17000 to $19000.
Option d is correct
jeff jeffy answered 1 year agoRelated Solutions
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