Chapter 14.I, Problem 16RE

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8th Edition

Robert Brechner + 1 other

ISBN: 9781305585447

Textbook Problem

Michael Sanchez purchased a condominium for $88,000. He made a 20% down payment and financed the balance with a 30-year. 9% fixed-rate mortgage.

a. What is the amount of the monthly principal and interest portion. PI. of Michael’s loan?

b. Construct an amortization schedule for the first four months of Michael's mortgage.

Payment |
Monthly |
Monthly |
Portion Used to |
Loan |

Number |
Payment |
Interest |
Reduce Principal |
Balance |

0 | ||||

1 | ||||

2 | ||||

3 | ||||

4 |

c. If the annual property taxes are $1,650 and the hazard insurance premium is $780 pet year, what is the total monthly PITI of Michael's loan?

**(a)**

To determine

**To calculate:** The monthly principal and interest portion, PI, of Michael’s loan, if he purchased a condominium for

Explanation

**Given Information:**

Michael’s purchased a condominium for

**Formula used:**

Steps to determine the monthly mortgage payment;

Step 1: Compute the number of

Step 2: Use table 14.1 (monthly payments to amortize principal and interest per

Step 3: Compute the monthly payment by the formula;

**Calculation:**

Michael’s purchased a condominium for

**(b)**

To determine

**To calculate:** An amortization schedule for the first four months and fill the table below;

Payment Number |
Monthly Payment |
Monthly Interest |
Portion Used to Reduce Principal |
Loan Balance |

0 | ||||

1 | ||||

2 | ||||

3 | ||||

4 |

**(c)**

To determine

**To calculate:** The total monthly PITI of Michael’s loan, if the annual property taxes are

Sect-14.I P-1TIESect-14.I P-2TIESect-14.I P-3TIESect-14.I P-4TIESect-14.I P-5TIESect-14.I P-1RESect-14.I P-2RESect-14.I P-3RESect-14.I P-4RESect-14.I P-5RE

Sect-14.I P-6RESect-14.I P-7RESect-14.I P-8RESect-14.I P-9RESect-14.I P-10RESect-14.I P-11RESect-14.I P-12RESect-14.I P-13RESect-14.I P-14RESect-14.I P-15RESect-14.I P-16RESect-14.I P-17RESect-14.I P-18RESect-14.I P-19RESect-14.I P-20RESect-14.I P-21RESect-14.I P-22RESect-14.II P-6TIESect-14.II P-7TIESect-14.II P-1RESect-14.II P-2RESect-14.II P-3RESect-14.II P-4RESect-14.II P-5RESect-14.II P-6RESect-14.II P-7RESect-14.II P-8RESect-14.II P-9RESect-14.II P-10RESect-14.II P-11RESect-14.II P-12RESect-14.II P-13RESect-14.II P-14RESect-14.II P-15RESect-14.II P-16RESect-14.II P-17RESect-14.II P-18RESect-14.II P-19RESect-14.II P-20RESect-14.II P-21RESect-14.II P-22RECh-14 P-1CRCh-14 P-2CRCh-14 P-3CRCh-14 P-4CRCh-14 P-5CRCh-14 P-6CRCh-14 P-7CRCh-14 P-8CRCh-14 P-9CRCh-14 P-10CRCh-14 P-11CRCh-14 P-12CRCh-14 P-13CRCh-14 P-14CRCh-14 P-1ATCh-14 P-2ATCh-14 P-3ATCh-14 P-4ATCh-14 P-5ATCh-14 P-6ATCh-14 P-7ATCh-14 P-8ATCh-14 P-9ATCh-14 P-10ATCh-14 P-11ATCh-14 P-12ATCh-14 P-13ATCh-14 P-14ATCh-14 P-15ATCh-14 P-16ATCh-14 P-17ATCh-14 P-18ATCh-14 P-19ATCh-14 P-20ATCh-14 P-21ATCh-14 P-22AT

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