MTH/216 (50 Quiz: Week 5 Checkpoint This Question: 1 pt 8 of 12 (7 complete Cons

Question

MTH/216 (50 Quiz: Week 5 Checkpoint This Question: 1 pt 8 of 12 (7 complete Consider a home mortgage of $175,000 at a fixed APR of 3% for 15 years. a. Calculate the monthly payment b. Determine the total amount paid over the term of the loan. c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest a. The monthly payment is S (Do not round until the final answer. Then round to the nearest cent as needed.) b, The total amount paid over the term of the loan is (Round to the nearest cent as needed.) c Of the total amount paid, % is paid toward the principal, and Round to one decimal place as needed ) 1% is paid for interest Enter your answer in each of the answer boxes

Explanation / Answer

N = 180

FV = 0

rate = 3%/12

PV = 175,000

use PMT function in Excel

a. monthly payments = 1208.52

b. total amount paid = 1208.52*180 = 217,533.22

c. % towards principal = 175,000/217,533.22 = 80.5%

% towards interest = 100% - 80.5% = 19.5%

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