You have just graduated from college and landed your first big job. You have alw

Question

You have just graduated from college and landed your first big job. You have always dreamed of being a homeowner, and after carefully shopping for your dream home, you find one that you would like to purchase at a cost of $250,000. After researching banks to find the best interest rate, you find that Banks for Homeowners offers the best rate of 6% interest that compounds monthly for 30 years.

What is the monthly payment for this loan?
What is the unpaid balance of the loan at the end of 5 years?
What is the unpaid balance at the end of the 10th year?

Explanation / Answer

((250000*.06)+250000)/(30*12)=736.11 736.11*(5*12)=44166.6 265000-44166.6= 220833.4 265000-44166.6*2= 176666.8

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