Daniel and Jan agreed to pay $558,000 for a four-bedroom colonial home in Waltha
ID: 3148224 • Letter: D
Question
Daniel and Jan agreed to pay $558,000 for a four-bedroom colonial home in Waltham, Massachusetts, with a $50,000 down payment. They have a 30-year mortgage at a fixed rate of 6.00%. (Use Table 15.1) a. How much is their monthly payment? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) Monthly payment $ b. After the first payment, what would be the balance of the principal? (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) Payment number Portion to— Balance of loan outstanding Interest Principal 1 $ $ $
Explanation / Answer
The mortage loan payment = Total Pric e- Down payment
P = $ 5,58,000 - $ 50000
P = $ 5,08,000
Time period t= 30 year = 30 * 12 = 360 months
Rate R = 6.00% = 6/1200 pr month
THe monthly EMI payment
EMI = [P x R x (1+R)N]/[(1+R)N-1]
MOnthly payment EMI = [508000 * (6/1200) * (1 + 6/1200)360] / [(1 + 6/1200)360 -1]
EMI = 15297.34/ 5.022575 = $ 3045.72
Here interest portion I = 508000 * (1 + 6/1200) - 508000 = $ 2540
Outstanding principal = $ 508000 - [ $ 3045.72 - $ 2540] = $ 507494.28
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.