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Johanna just purchased a home and took out a $180,000 mortgage for 20 years at 5%,...

Johanna just purchased a home and took out a $180,000 mortgage for 20 years at 5%, compounded monthly.

a. How much is Johanna’s monthly mortgage payment?

b. Prepare an amortization table for the traditional 20-year mortgage.

c. Assume Johanna makes her normal mortgage payments and at the end of four years, she refinances the balance of her loan at 3%. If she continues to make the same mortgage payments, how soon after the first four years will she pay off his mortgage?

Johanna just purchased a home and took out a $180,000 mortgage for 20 years at 5%, compounded monthly.

a. How much is Johanna’s monthly mortgage payment?

b. Prepare an amortization table for the traditional 20-year mortgage.

c. Assume Johanna makes her normal mortgage payments and at the end of four years, she refinances the balance of her loan at 3%. If she continues to make the same mortgage payments, how soon after the first four years will she pay off his mortgage?

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Expert Solution

jeff jeffy answered 1 year ago
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