Answered: Find the amount of periodic payment…

College Algebra

7th Edition

ISBN:9781305115545

Author:James Stewart, Lothar Redlin, Saleem Watson

Publisher:James Stewart, Lothar Redlin, Saleem Watson

Chapter8: Sequences And Series

Section8.4: Mathematics Of Finance

Problem 26E

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Equity in a Home When you purchase a home by securing a mortgage, the total paid toward the principal is your equity in the home. Technically, the lending agency calculates your equity by subtracting the amount you still owe on your mortgage from the current value of your home, which may be higher or lower than your principal. Assume that your mortgage is for 350, 000 at a monthly rate of 0.007 as a decimal and that the term of the mortgage is 30 years. Then your equity after k monthly payments is 350, 0001.007k-11.007360-1 dollars. Calculate the equity in your home after 10 years.
To get the best loan rates available, the Riches want to save enough money to place 20% down on a $160,000 home. They plan to make monthly deposits of $125 in an investment account that offers 8.5% annual interest compounded semiannually. Will the Riches have enough for a 20% down payment after five years of saving? How much money will they have saved?

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Find the amount of periodic payment necessary for the deposit to a sinking fund. (Round your answer to the nearest cent.) $ Amount Needed A Frequency n Rate r Time t $80,000 semiannually 4% 15 yr