A) how much will you have for a down payment in 5 years ? B) in addition to your

Question

A) how much will you have for a down payment in 5 years ?
B) in addition to your down payment you will borrow 320000$ to pay for your condo. If the interest rate is 4.2% on your 25 year mortgage. What will be your monthly mortgage payment?
C) what price are you paying for the condo?
D) how much total interest in $ would you have paid once your mortgage is paid off ?
34 total points. You are so excited to buy a condo and are going to start saving right away. You will make mont deposits of SSSO into an account that you think will pay 7.8% peryear. You make your first payment today 4. hly

Explanation / Answer

A) n = 60,pv = 0, pmt = 550, rate = 7.8%/12

use FV function in Excel with type as 1

amount for downpayment = 40,463.60

B) PV = 320,000, FV = 0, N = 300, rate = 4.2%/12

use PMT function in Excel

monthly mortgage = 1,724.6154

C) total price = 40,463.60 + 320,000 = 360,463.60

D) total interest = 1,724.6154 * 300 - 320,000 = 197,384.63

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