Question

For Problems 1-3: Use the TVM solver on the calculator as needed, fill in the information from the calculator.

The Taylor’s have purchased a $270,000 house. They made an initial down payment of $40,000 and secured a 30-year mortgage with interest charged at the rate of 6% per year compounded monthly.

1. What monthly payment will the Taylors be required to make?

Work Here (Keyboard only):

_____________________________________________

N =			FV =
I% =			P/Y =	12
PV =			C/Y =	12
PMT =			PMT: (End/Begin)	End

Answer Here (Keyboard only):

Calculator display:    Final Answer:

2. What is their outstanding balance after 10 years?

Work Here (Keyboard only):

N =			FV =
I% =			P/Y =	12
PV =			C/Y =	12
PMT =			PMT: (End/Begin)	End

Answer Here (Keyboard only):

Calculator display: Final Answer:

3. What is their equity after 10 years?

Work Here (No images of written work):

Answer Here (No images of written work):

Answer 1

1)

N = 30*12=360

FV = 0

I% = 6/12= 0.5

P/Y = 12

PV = - (270000-40000)= -230000

C/Y = 12

End

PMT = 1378.97 (Monthly payment)

2)

N = 360-120=240  

FV = 0

  I% = 0.5

P/Y = 12

C/Y = 12

PMT = -1378.97

End

Solve for PV as 192477.17 (Loan outstanding after 10 years)

3) Equity on the house= Down payment + (Loan taken-Loan outstanding)

= 40000+ (230000-192477.17)

= $ 77522.83