You want to buy a $300,000 house. You plan to make a down payment of 20% of the purchase price and finance the rest with a 30-year fixed rate mortgage loan. The loan is fully amortizing, and requires monthly payments at the end of each month. The annual interest for the loan is 5%, compounded monthly. 1) How much of the purchase price will you finance with the mortgage loan? 2) What is your anticipated monthly mortgage payment?
You want to buy a $300,000 house. You plan to make a down payment of 20% of the purchase price and finance the rest with a 30-year fixed rate mortgage loan. The loan is fully amortizing, and requires monthly payments at the end of each month. The annual interest for the loan is 5%, compounded monthly. 1) How much of the purchase price will you finance with the mortgage loan? 2) What is your anticipated monthly mortgage payment?
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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You want to buy a $300,000 house. You plan to make a down payment of 20% of the purchase price and finance the rest with a 30-year fixed rate mortgage loan. The loan is fully amortizing, and requires monthly payments at the end of each month. The annual interest for the loan is 5%, compounded monthly. 1) How much of the purchase price will you finance with the mortgage loan? 2) What is your anticipated monthly mortgage payment? |
Answer | |
1) Loan amount | |
2) Monthly payment | |
Answer | |
N | |
I | |
PV | |
PMT | |
FV |
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