Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financing the rest at 8% interest for 30 years.Your existing mortgage (the one you got 10 years ago) This year (10 years after you first took out the loan), you check your loan balance. Only part of your payments have been going to pay down the loan; the rest has been going towards interest. You see that you still have $118,428 left to pay on your loan. Your house is now valued at $210,000. How much total interest will you be paying (consider the interest you paid over the first 10 years of your original loan as well as interest on your refinanced loan)
Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financing the rest at 8% interest for 30 years.Your existing mortgage (the one you got 10 years ago) This year (10 years after you first took out the loan), you check your loan balance. Only part of your payments have been going to pay down the loan; the rest has been going towards interest. You see that you still have $118,428 left to pay on your loan. Your house is now valued at $210,000. How much total interest will you be paying (consider the interest you paid over the first 10 years of your original loan as well as interest on your refinanced loan)
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 15P
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Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financing the rest at 8% interest for 30 years.
Your existing mortgage (the one you got 10 years ago)
This year (10 years after you first took out the loan), you check your loan balance. Only part of your payments have been going to pay down the loan; the rest has been going towards interest. You see that you still have $118,428 left to pay on your loan. Your house is now valued at $210,000.
How much total interest will you be paying (consider the interest you paid over the first 10 years of your original loan as well as interest on your refinanced loan)
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