question 1. Find the monthly house payments necessary to amortize a 6.06.0% loan

Question

question 1.

Find the monthly house payments necessary to amortize a 6.06.0% loan of $122 comma 300122,300 over 25 years. The payment size is $nothing.

(Round to the nearest cent.)

question (2)

Suppose that $160, 000160,000 is owed on a house after the down payment is made. The monthly payment for principal and interest at 9.59.5% for 30 years is 160 times 8.40854 equals $ 1345.37 .160•8.40854 = $1345.37.

What is the total amount that will be paid for principal and interest?The total amount that will be paid for principal and interest is $nothing.

(Round to the nearest cent as needed.)

Explanation / Answer

1. Here we could use the present value of ordinary formula
PV = C*[1-(1+i)^(-n)]/i

here present value PV = $122,300
                  i is the interest rate per year =6.06.0% = 0.0606
                C is the monthly payment
               n is the total payments = 25*12 = 300

=> PV = C*[1-(1+i)^(-n)]/i

     122300 = C*[1-(1+0.0606)^(-300)]/0.0606
hece C = $ 7411.38
Hence the monthly house payment is = $ 7411.38

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