4-22 Suppose you have been shopping for mortgages to finance the house that you

Question

4-22 Suppose you have been shopping for mortgages to finance the house that you want to buy. The East Coast Federal Credit Union (ECFCU) has offered a 30-year fixed mortgage that requires you to pay 6 percent
interest compounded monthly. The purchase
price of the house is $260,000, and you
plan to make a down payment equal to
$28,000. What would your monthly pay-
ments be with the ECFCU mortgage?
In problem 4-22, you should have found that the monthly payment is $1,391. Suppose it is now 10 years later, such that you have lived in the house for 10 years, and you
are considering paying off your mortgage.
How much do you owe on the mortgage if this month's payment was made yesterday?

Explanation / Answer

I use BA-2 Ti 30-year fixed= 30x12 = 360 months, 6 percent interest compounded monthly, A= -$260,000 D= down payment equal to +$28,000 enter N= 360 , I/Y = 6 , PV= -232000 , FV=0, CMPT---> PMT you get onthly pay- ments be with the ECFCU mortgage around 1392 ok now for 10 years = find PV N= 120 , I/Y = 6 , PMT= 1391 , FV=0, CMPT---> PV rest you pay in lump sum Please rate

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