You are buying a house for 250,000 a. If i make a down payment of 50,000 and mor

Question

You are buying a house for 250,000 a. If i make a down payment of 50,000 and mortgage the rest at8.5% compounded monthly, what will be the monthly payment to retirethe mortgage on 15 years? b. Consider the 7th payment. How much will the interest andprincipal payments be? You are buying a house for 250,000 a. If i make a down payment of 50,000 and mortgage the rest at8.5% compounded monthly, what will be the monthly payment to retirethe mortgage on 15 years? b. Consider the 7th payment. How much will the interest andprincipal payments be?

Explanation / Answer

8.5% (Compounded Monthly)

180 Payments

8.5% / 12

15*12 = 180

Present Value of your loan amount (PV) $250,000 Less: Down Payment $50,000 Present Valueof Your loan Amount (PV) $200,000 Interest rate

8.5% (Compounded Monthly)

Number of Payments (15years * 12)

180 Payments

(a) Calculating Monthly Payment Using ExcelPMT function: Interest Rate (Rate)

8.5% / 12

Number of Payments(Nper)

15*12 = 180

Present Value of the Loan(PV) -$200,000 Payment (PMT) $1,969.48

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