You are about to buy a home; the purchase price of the car is $200,000 and you are paying 10% of that amount as a down payment and financing the remainder.

You are about to buy a home; the purchase price of the car is $200,000 and you are paying 10% of that amount as a down payment and financing the remainder. Your mortgage loan terms are 30 years of monthly payments at an annual rate of 3.25%.

How much are your monthly mortgage payments?
Over the life of the loan, how much did you pay in interest?

Solutions

Expert Solution

Purchase price of Car = $200,000

Loan Amount = Price*(1- % of Down-payment)

= $200,000*(1-0.10)

= $180,000

a). Calculating the Monthly loan payment :-

Where, P = Loan amount = $180,000

r = Periodic Interest rate = 3.25%/12 = 0.2708333%

n= no of periods = 30 years*12 = 360

Monthly Mortgage Payment = $783.37

b). Total Interest over life of loan = (No of payments*Monthly loan payment) - Loan amount

= (360*$783.37)- $180,000

= $102,013.2

jeff jeffy answered 2 years ago

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