Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN: 9780357033609
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
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Chapter 5, Problem 7FPE
a.
Summary Introduction
To calculate: The monthly mortgage payment.
b.
Summary Introduction
To calculate: The monthly mortgage payment.
c.
Summary Introduction
To calculate: The monthly mortgage payment.
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Consider a traditional 30-year fixed rate mortgage, borrowing $400,000 (present value) at an annual interest rate of 3.25%, payable in monthly payments. Create an Excel spreadsheet and use basic math functions to develop a schedule for the entire life of the loan. Your table should include columns for Payment #, Principle Remaining, Interest Paid, Principal Paid, Cumulative Interest Paid, and Cumulative Principal Paid. Then use this table to answer the following questions:
c. How much did the borrower pay in total to pay off this loan, if they paid just the minimum payment for the entire 30 years? And how much of that total is just interest?
d. Create a graph of the interest and principal amounts paid each month, for just the first two years of the loan. (Hint: use an “X Y Scatter” chart type)
e. Bonus question: How much sooner (in months) would the borrower pay off this loan, if they paid an extra $100 per month? Your Excel spreadsheet must show this calculation
The following formula is used for figuring out a monthly home mortgage payment: 7(12t) r Lr1+ 12 M = 12t 12 1+ 12 -1 Where: L = the loan amount in dollars the annual interest rate expressed as decimal t = the number of years of the loan M= the monthly payment in dollars r = You are looking to buy a $275,599.00 home in Haverhill. If Bank of America will give them a 30-year mortgage at 6.75% annual interest rate for the cost of the house after they receive a 10% down payment. A. Determine the loan amount? B. How much their monthly payment will be? C. At the end of the 30-years, how much total money will you have paid to Bank of America for your home? In another word how much did the $275,599.00 house really cost the couple? D. How much interest will they have paid? E. How many of her monthly payment go toward the interest? F. What percent increase over the cost of the home does this interest represent? G. Redo and re-answer all questions, but this time for 15 years? Do analysis…
Solve the problem. If necessary, use the accompanying table of monthly payments. Round your answer to the nearest cent.
Find the monthly payment needed to amortize principal and interest for the following fixed-rate mortgage.
Mortgage amount: $73,500
Term of mortgage: 20 years
Interest rate: 10.5%
Chapter 5 Solutions
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
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Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
Pfin (with Mindtap, 1 Term Printed Access Card) (...
Finance
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning