The Taylors have purchased a $270,000 house. They made an initial down payment o

Question

The Taylors have purchased a $270,000 house. They made an initial down payment of $30,000 and secured a mortgage with interest charged at the rate of 6%/year on the unpaid balance. Interest computations are made at the end of each month. If the loan is to be amortized over 30 years, what monthly payment will the Taylors be required to make? (Round your answer to the nearest cent.) $ What is their equity (disregarding appreciation) after 5 years? After 10 years? After 20 years? (Round your answers to the nearest cent.) 5 years     $ 10 years     $ 20 years     $

Explanation / Answer

Put these formulas in excel to get answers:

a) =PMT(6%/12,30*12,-240000)

So, monthly payment would be : = $ 1,438.92

b) After 5 years equity is:

Apply same formula with time 25 years, 20 years and 10 years

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