A couple gets financing for 90% of the $430,000 purchase price of a house at a r
ID: 2456539 • Letter: A
Question
A couple gets financing for 90% of the $430,000 purchase price of a house at a rate of 4.5% on the monthly unpaid balance. For each problem below assume the loan is for 20 years and then 30 years. a. Find the amount of the monthly payments to repay the loan. b. Find the total amount paid to the finance company. c. Find the amount of interest paid for the loan. d. For the 20 year loan, create an amortization table. 2. Sarah has a loan for $10,000 with an annual interest rate of 16%. How long will it take Sarah to pay off the loan if she makes monthly payments of $200. How much money does Sarah save if she makes $250 monthly payments instead of $200?
Explanation / Answer
A couple gets financing for 90% of the $430,000 purchase price of a house at a rate of 4.5% on the monthly unpaid balance. For each problem below assume the loan is for 20 years and then 30 years. a. Find the amount of the monthly payments to repay the loan. b. Find the total amount paid to the finance company. c. Find the amount of interest paid for the loan. d. For the 20 year loan, create an amortization table
A couple gets financing for 90% of the $430,000 purchase price of a house at a rate of 4.5% on the monthly unpaid balance. For each problem below assume the loan is for 20 years and then 30 years. a. Find the amount of the monthly payments to repay the loan. b. Find the total amount paid to the finance company. c. Find the amount of interest paid for the loan. d. For the 20 year loan, create an amortization table
a. Amount Borrowed = $430,000 x 90% $387,000 Rate = 4.50%/12 0.38% per month Nper= 20 years x 12 240 Periods PMT for 20 years $2,448.35 Amount Borrowed = $430,000 x 90% $387,000 Rate = 4.50%/12 0.38% per month Nper= 30 years x 12 360 Periods PMT for 30 years $1,960.87 Calculated in Excel using PMT b. Total Amount Paid for 20 years loan Amount Borrowed = $430,000 x 90% $387,000 Rate = 4.50%/12 0.38% per month Nper= 20 years x 12 240 Periods PMT $2,448.35 Future Value (FV) $950,265.48 Total Amount Paid for 30 years loan Amount Borrowed = $430,000 x 90% $387,000 Rate = 4.50%/12 0.38% per month Nper= 30 years x 12 360 Periods PMT $1,960.87 Future Value (FV) $1,489,059.15 c. Amount of Interest Paid = $950,265.48 - $387,000 $563,265.48 Amount of Interest Paid = $1,489,059.15 - $387,000 $1,102,059.15Related Questions
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