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Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

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BuyFindarrow_forward

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

Use Table 14-1 to calculate the monthly principal and interest and calculate the monthly PITI for the following mortgages.

AmountFinanced InterestKate Term of Loan MonthlyPI AnnualPropertyTax AnnualInsurance MonthlyPITI
$162,100 5.50% 15 years _______ $2,275 $1,033 ____________

To determine

To calculate: The monthly principal and interest and the monthly PITI when amount financed is $162,100, interest rate is 5.5 %, term of loan is 15 years, annual property tax is $ 2275 and annual insurance is $ 1033.

Explanation

Given Information:

Amount Financed is $ 162100, interest rate is 5.5 %, term of loan is 15 years, annual property tax is $ 2275 and annual insurance is $ 1033

Formula used:

The formula for the number of $ 1000s finance is

Number of $1000s financed=Amount Financed1000

Use the table 14.1 to calculate the table factor. Locate the table factor on the intersection of the number of years column and the interest rate row.

The formula for Monthly PI (Principal and interest portion) is

Monthly PI=Number of 1000s financed×Table Factor

And TI (Monthly tax and insurance portion) is

Monthly TI=Estimated Property Tax+Hazard Insurance12

Monthly PITI is given by,

Monthly PITI=PI+TI

Calculation:

Consider the provided values,

Amount Financed=$162,100Interest Rate=5.5%Term of Loan=15yearsAnnual Proprety Tax=$2275

And

Annual Insurance=$1033

To calculate number of $ 1000 financed, apply the formula

Number of $1000s financed=Amount Financed1000=1621001000=162

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