You are about to buy your first home. You will take out a $300,000 mortgage for

Question

You are about to buy your first home. You will take out a $300,000 mortgage for 30 years, monthly payments, with a fixed rate of 6%

A) What is your monthly payment? i) How much of that payment will be applied to interest? ii) How much will be applied to the principle?

B) What will your total payments be over the entire 30 year period? i) How much of that total will be interest? ii) How much will be principle?

C) What will be the outstanding loan balance after 10 years?

D) During that 10 year period, what were your total payments? i) How much of that total will be interest? ii) How much will be principle?

E) What will be the outstanding loan balance after 20 years?

F) During that 20 year period, what were your total payments? i) How much of that total will be interest? ii) How much will be principle?

Please show your work. You can solve these questions using the TMV Solver App in the Financial calculate, but please indicate what variables you plugged in.

Explanation / Answer

A) EMI- $ 1799, Principal- 299 and interest 1500

B) Total Payment= 647515, interest -347515 and principal- 300000

C) Loan Balance after 10 years = 251057

E) Loan balance after 20 years = 162011

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