Question 7 (or 10) value: 2.00 points Joe Levi bought a home in Arlington, Texas

Question

Question 7 (or 10) value: 2.00 points Joe Levi bought a home in Arlington, Texas, for S 131,000 He put down 30% and obtained a mortgage for 30 years at 5.50%. (Use Table 15.1.) a. What is Joe's monthly payment? (Do not round intermediate calculations. Round your answer to the nearest cent.) Monthly payment b. What is the total interest cost of the loan? (Do not round intermediate calculations. Round your Total interest cost Hints References eBook & Resources Hint#1 Ask your instructor a question

Explanation / Answer

Loan Amount =$131000*0.70 =$91700 Formula for Monthly Instalment = P * [r * (1+r)^n]/[(1+r)^n    -1] P = Loan amount =$91700 r = 5.5% annually Monthly Interest =5.5%/12 =0.4583% =0.004583 n = Number of Periods =30 *12 =360 Monthly instament = $91700 *[0.004583* (1+0.004583)^360] /[(1+0.004583)^360 -1] Monthly instament = $91700 *[0.004583* 5.186768] /4.186768 (a) Monthly instament = 2179.80 /4.186768 =$520.64 (b) Total Interest cost of the loan Total Monthly payments made =$520.64*360 =$187,430.40 Total Interest cost = Total Amount Paid - Loan Amount =$187430.40 - $91700 =$95730.40

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.