Question

In: Finance

You are buying a new house on a 30-year, 5.2% mortgage loan of $230,000. A) How...

You are buying a new house on a 30-year, 5.2% mortgage loan of $230,000.

A) How much will your monthly payments be?

B) How much will go toward principal in the 75th month? How much will go toward interest in the 75th month? What will be the balance after 75 months?

C) How much interest will you pay in total over the 30 years?

D) If you do a 15-year loan instead of a 30-year one, how much will you save in total interest?

Expert Solution

A) So monthly payments will be $1263. (Using PMT formula in excel. Refer Image)

B) In 75^th month

1) Principal Amount = $357.31

2) Interest Amount = $905.64

3) Balance = $208,637.19

C) Total Interest = $224,663.81

D) Total Interest in case of 15 year = $101,717.97

So Amount saved = Interest in case of 30 years - Interest in case of 15 years

= $224,663.81 - $101,717.97

= $122,945.84

jeff jeffy answered 2 years ago

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