Question

In: Finance

You plan to purchase a $150,000 house using a 15-year mortgage obtained from your local credit...

You plan to purchase a $150,000 house using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is 6.75 percent. You will make a down payment of 15 percent of the purchase price.

a. Calculate your monthly payments on this mortgage.
b. Calculate the amount of interest and, separately, principal paid in the 60th payment.
c. Calculate the amount of interest and, separately, principal paid in the 150th payment.
d. Calculate the amount of interest paid over the life of this mortgage.

Solutions

Expert Solution

a. Monthly Payment =-pmt(rate,nper,pv,fv)
= $   1,128.26
Where,
rate = 6.75%/12 = 0.005625
nper = 15*12 = 180
pv = 150000*(1-0.15) = $       1,27,500
fv = 0
b. Interest paid $       555.93
Principal Paid $       572.33
Working:
Balance of loan after 59th Payment =pv(rate,nper,pmt,fv)
= $ 98,832.14
Where,
rate = 0.005625
nper = 180-59 = 121
pmt = $     -1,128.26
fv = 0
Interest paid = Loan value at beginning*monthly interest rate
= $ 98,832.14 * 0.005625
= $       555.93
Principal Paid = Monthly Payment - Monthly Interest
= $   1,128.26 - $           555.93
= $       572.33
c. Interest paid $      180.08
Principal Paid $       948.18
Working:
Balance of loan after 149th Payment =pv(rate,nper,pmt,fv)
= $ 32,014.02
Where,
rate = 0.005625
nper = 180-149 = 31
pmt = $     -1,128.26
fv = 0
Interest paid = Loan value at beginning*monthly interest rate
= $ 32,014.02 * 0.005625
= $       180.08
Principal Paid = Monthly Payment - Monthly Interest
= $   1,128.26 - $           180.08
= $       948.18
d. Interest paid $ 75,586.72
Working:

Related Solutions

You plan to purchase a $150,000 house using a 15-year mortgage obtained from your local credit...
You plan to purchase a $150,000 house using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is 6.25 percent. You will make a down payment of 10 percent of the purchase price. a. Calculate your monthly payments on this mortgage. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))   Monthly payment $ b. Calculate the amount of interest and, separately, principal paid in the 20th payment. (Do not...
You plan to purchase a $150,000 house using a 15-year mortgage obtained from your local credit...
You plan to purchase a $150,000 house using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is 6.25 percent. You will make a down payment of 10 percent of the purchase price. a. Calculate your monthly payments on this mortgage. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))   Monthly payment $    b. Calculate the amount of interest and, separately, principal paid in the 20th payment. (Do not...
You plan to purchase a $200,000 house using a 15-year mortgage obtained from your local credit...
You plan to purchase a $200,000 house using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is 7 percent. You will make a down payment of 10 percent of the purchase price. a. Calculate your monthly payments on this mortgage. b. Construct the amortization schedule for the first six payments.   Construct the amortization schedule for the first six payments. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))...
You plan to purchase a $160,000 house using a 15-year mortgage obtained from your local credit...
You plan to purchase a $160,000 house using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is 6 percent. You will make a down payment of 10 percent of the purchase price. a. Calculate your monthly payments on this mortgage. b. Construct the amortization schedule for the first six payments.    A-Calculate your monthly payments on this mortgage. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Monthly...
You plan to purchase a house for $175,000 using a 15-year mortgage obtained from your local...
You plan to purchase a house for $175,000 using a 15-year mortgage obtained from your local bank. You will make a down payment of 25 percent of the purchase price. You will not pay off the mortgage early. (LG 7-3) a. Your bank offers you the following two options for payment: Option 1: Mortgage rate of 5 percent and zero points. Option 2: Mortgage rate of 4.75 percent and 2 points. Which option should you choose? b. Your bank offers...
You plan to purchase a house for $200,000 using a 15-year mortgage obtained from your local...
You plan to purchase a house for $200,000 using a 15-year mortgage obtained from your local bank. You will make a down payment of 10 percent of the purchase price. You will not pay off the mortgage early. Assume the homeowner will remain in the house for the full term and ignore taxes in your analysis. a. Your bank offers you the following two options for payment. Which option should you choose? Option 1: Mortgage rate of 6.25 percent and...
You plan to purchase a house for $247,000 using a 15-year mortgage obtained from your local...
You plan to purchase a house for $247,000 using a 15-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price. You will not pay off the mortgage early. Assume the homeowner will remain in the house for the full term and ignore taxes in your analysis. a. Your bank offers you the following two options for payment. Which option should you choose? Option 1: Mortgage rate of 6.8 percent and...
You plan to purchase a house for $127,000 using a 15-year mortgage obtained from your local...
You plan to purchase a house for $127,000 using a 15-year mortgage obtained from your local bank. You will make a down payment of 10 percent of the purchase price. You will not pay off the mortgage early. Assume the homeowner will remain in the house for the full term and ignore taxes in your analysis. a. Your bank offers you the following two options for payment. Which option should you choose? Option 1: Mortgage rate of 5.75 percent and...
You plan to purchase a $200,000 house using a 30-year mortgage obtained from your local credit...
You plan to purchase a $200,000 house using a 30-year mortgage obtained from your local credit union. The mortgage rate offered to you is 6.50 percent. You will make a down payment of 20 percent of the purchase price. (LG 7-4) a. Calculate your monthly payments on this mortgage. b. Construct the amortization schedule for the first six payments. please show in excel
You plan to purchase an $80,000 house using a 15-year mortgage obtained from your local bank....
You plan to purchase an $80,000 house using a 15-year mortgage obtained from your local bank. The mortgage rate offered to you is 8.00 percent. You will make a down payment of 20 percent of the purchase price. Calculate your monthly payments on this mortgage. Calculate the amount of interest and, separately, principal paid in the 4th payment. Calculate the amount of interest paid over the life of this mortgage. (use bank rate.com, mortgage amortization table What will be your...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT