You plan to purchase an $100,000 house using a 30-year mortgage obtained from yo

Question

You plan to purchase an $100,000 house using a 30-year mortgage obtained from your local bank. The mortgage rate offered to you is 5 percent. You will make a down payment of 10 percent of the purchase price.

a. Calculate your monthly payments on this mortgage. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Monthly payment $

b. Calculate the amount of interest and, separately, principal paid in the 250th payment. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) Amount of interest $ Amount of principal $

c. Calculate the amount of interest and, separately, principal paid in the 225th payment. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) Amount of interest $ Amount of principal $

d. Calculate the amount of interest paid over the life of this mortgage. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Amount of interest paid $

Explanation / Answer

down payment=10% of 100,000= 10,000

Loan borrowing=100,000 - 10,000=90,000

Answer 1

Using Financial calculator

FV=0

N=360 that is 30×12=360

PV=-90,000

I/Y=5/12.=0.416666

FV=0

Press CPT and PMT

PMT=483.14

Answer 2

Press 2nd + PV

P01=250

P02=250

scroll down twice

Principal=304.52

Interest=178.61

Answer 3

Press 2nd + PV

P01=225

P02=225

scroll down twice

Principal=274.46

Interest=208.67

Answer 4

Press 2nd + PV

P01=1

P02=4

scroll down twice

Principal=90,000

Interest=83930.21

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