solve question number 5 and 7 Part 1: Complete the following showing your set-up

Question

solve question number 5 and 7

Part 1: Complete the following showing your set-ups. All your comparisons will be made to this first home. 1. $220,000 with a 20 % down and with an You are making all comparisons to this home, buying price interest rate of 6.5%. a) Find the mortgage amount a. 2 points b) Find the monthly payment if the term b is 30 years. (Show the set-up) You will be comparing problems 2 and 3 to this and using this for your amortization. 4 points c) Find the monthly payment if the te is 15 years. 4 points d) Find the total interest on the 30-yea d loan. 2 points

Explanation / Answer

a) Buying price $220,000.00 Less: 20% Down Payment $44,000.00 Mortgage amount $176,000.00 b) Loan (PV) $176,000.00 Period = 30 x 12 360 Rate = 6.5%/12 0.54% Monthly payment = PMT(rate,period,-PV) $1,112.44 c) Loan (PV) $176,000.00 Period = 15 x 12 180 Rate = 6.5%/12 0.54% Monthly payment = PMT(rate,period,-PV) $1,533.15 d) Total Interest = ($1,112.44 x 360 ) - $176000 $224,478.30 e) Total Interest = ($1,533.15 x 180 ) - $176000 $99,966.81 f) Savings = ($224,478.30 - $99,966.81) $124,511.49

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