Question

MUST SHOW ALL WORK

Suppose you want to purchase a home for $445,000 with a 30-year mortgage at 4.17% interest. Suppose also that you can put down 20%. Find

(a) What are the monthly payments?

(b) What is the total amount paid for principal and interest?

(c) What is the amount saved if this home is financed for 15 years instead of for 30 years?

Answer 1

(a)	Monthly Payment	=-pmt(rate,nper,pv,fv)
		= $ 1,734.67
	Where,
	rate	=	4.17%/12	=	0.003475
	nper	=	30*12	=	360
	pv	=	445000*(1-0.20)	=	$       3,56,000
	fv			=	0
(b)	Principal Paid	$ 3,56,000.00
	Interest Paid	$ 2,68,482.41
Working:
Total repayment	$ 1,734.67	*	360	=	$ 6,24,482.41
Loan amount					$ 3,56,000.00
Interest Paid					$ 2,68,482.41
(c)	Saving of Interest	$ 1,45,012.85
Working:
# 1	Monthly Payment with 15 Years life	=-pmt(rate,nper,pv,fv)
		= $ 2,663.72
	Where,
	rate	=	4.17%/12	=	0.003475
	nper	=	15*12	=	180
	pv	=	445000*(1-0.20)	=	$       3,56,000
	fv			=	0
# 2	Total repayment	$       2,663.72	*	180	=	$ 4,79,469.56
	Loan amount					$ 3,56,000.00
	Interest paid over 15 years				$ 1,23,469.56
# 3	Interest paid over 30 years	$ 2,68,482.41
	Interest paid over 15 years	$ 1,23,469.56
	Saving of Interest	$ 1,45,012.85