A mortgage broker is offering a 25-year $270,000 mortgage with a teaser rate. In the first...

A mortgage broker is offering a 25-year $270,000 mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 3.6 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 6.6 percent APR.

1) What are the monthly payments in the first two years?

2) What are the monthly payments after the second year?

P.s. Previous expert answered 1) 1,366.221 - and it was correct answer;

2) 1,823.38 (if you round it down to 2 decimal) - and this was an INCORRECT answer.

Please HELP!!!

Expert Solution

	Monthly rate(M)=	yearly rate/12=	0.55%	Monthly payment=	1806.55
Month	Beginning balance (A)	Monthly payment	Interest = M*A	Principal paid	Ending balance
1	256180.19	1806.55	1408.99	397.55	255782.64
2	255782.64	1806.55	1406.80	399.74	255382.90
3	255382.90	1806.55	1404.61	401.94	254980.96
4	254980.96	1806.55	1402.40	404.15	254576.81
5	254576.81	1806.55	1400.17	406.37	254170.44
6	254170.44	1806.55	1397.94	408.61	253761.83
7	253761.83	1806.55	1395.69	410.85	253350.97
8	253350.97	1806.55	1393.43	413.11	252937.86
9	252937.86	1806.55	1391.16	415.39	252522.47
10	252522.47	1806.55	1388.87	417.67	252104.80
11	252104.80	1806.55	1386.58	419.97	251684.83
12	251684.83	1806.55	1384.27	422.28	251262.55
13	251262.55	1806.55	1381.94	424.60	250837.95
14	250837.95	1806.55	1379.61	426.94	250411.02
15	250411.02	1806.55	1377.26	429.28	249981.73
16	249981.73	1806.55	1374.90	431.65	249550.09
17	249550.09	1806.55	1372.53	434.02	249116.07
18	249116.07	1806.55	1370.14	436.41	248679.66
19	248679.66	1806.55	1367.74	438.81	248240.85
20	248240.85	1806.55	1365.32	441.22	247799.63
21	247799.63	1806.55	1362.90	443.65	247355.98
22	247355.98	1806.55	1360.46	446.09	246909.90
23	246909.90	1806.55	1358.00	448.54	246461.36
24	246461.36	1806.55	1355.54	451.01	246010.35
25	246010.35	1806.55	1353.06	453.49	245556.86
26	245556.86	1806.55	1350.56	455.98	245100.88
27	245100.88	1806.55	1348.05	458.49	244642.39
28	244642.39	1806.55	1345.53	461.01	244181.38
29	244181.38	1806.55	1343.00	463.55	243717.83
30	243717.83	1806.55	1340.45	466.10	243251.73
31	243251.73	1806.55	1337.88	468.66	242783.07
32	242783.07	1806.55	1335.31	471.24	242311.83
33	242311.83	1806.55	1332.72	473.83	241838.00
34	241838.00	1806.55	1330.11	476.44	241361.57
35	241361.57	1806.55	1327.49	479.06	240882.51
36	240882.51	1806.55	1324.85	481.69	240400.82
37	240400.82	1806.55	1322.20	484.34	239916.48
38	239916.48	1806.55	1319.54	487.00	239429.48
39	239429.48	1806.55	1316.86	489.68	238939.79
40	238939.79	1806.55	1314.17	492.38	238447.42
41	238447.42	1806.55	1311.46	495.08	237952.33
42	237952.33	1806.55	1308.74	497.81	237454.52
43	237454.52	1806.55	1306.00	500.55	236953.98
44	236953.98	1806.55	1303.25	503.30	236450.68
45	236450.68	1806.55	1300.48	506.07	235944.62
46	235944.62	1806.55	1297.70	508.85	235435.77
47	235435.77	1806.55	1294.90	511.65	234924.12
48	234924.12	1806.55	1292.08	514.46	234409.65
49	234409.65	1806.55	1289.25	517.29	233892.36
50	233892.36	1806.55	1286.41	520.14	233372.23
51	233372.23	1806.55	1283.55	523.00	232849.23
52	232849.23	1806.55	1280.67	525.87	232323.35
. . .
246	51359.38	1806.55	282.48	1524.07	49835.31
247	49835.31	1806.55	274.09	1532.45	48302.86
248	48302.86	1806.55	265.67	1540.88	46761.98
249	46761.98	1806.55	257.19	1549.35	45212.63
250	45212.63	1806.55	248.67	1557.88	43654.75
251	43654.75	1806.55	240.10	1566.44	42088.31
252	42088.31	1806.55	231.49	1575.06	40513.25
253	40513.25	1806.55	222.82	1583.72	38929.53
254	38929.53	1806.55	214.11	1592.43	37337.09
255	37337.09	1806.55	205.35	1601.19	35735.90
256	35735.90	1806.55	196.55	1610.00	34125.91
257	34125.91	1806.55	187.69	1618.85	32507.05
258	32507.05	1806.55	178.79	1627.76	30879.30
259	30879.30	1806.55	169.84	1636.71	29242.59
260	29242.59	1806.55	160.83	1645.71	27596.88
261	27596.88	1806.55	151.78	1654.76	25942.12
262	25942.12	1806.55	142.68	1663.86	24278.25
263	24278.25	1806.55	133.53	1673.01	22605.24
264	22605.24	1806.55	124.33	1682.22	20923.02
265	20923.02	1806.55	115.08	1691.47	19231.55
266	19231.55	1806.55	105.77	1700.77	17530.78
267	17530.78	1806.55	96.42	1710.13	15820.66
268	15820.66	1806.55	87.01	1719.53	14101.12
269	14101.12	1806.55	77.56	1728.99	12372.14
270	12372.14	1806.55	68.05	1738.50	10633.64
271	10633.64	1806.55	58.49	1748.06	8885.58
272	8885.58	1806.55	48.87	1757.67	7127.90
273	7127.90	1806.55	39.20	1767.34	5360.56
274	5360.56	1806.55	29.48	1777.06	3583.50
275	3583.50	1806.55	19.71	1786.84	1796.66
276	1796.66	1806.55	9.88	1796.66	0.00

jeff jeffy answered 2 years ago

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