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 $10,000 and secured a mortgage with interest charged at the rate of 7%/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.)

Explanation / Answer

P = L[c(1 + c)n]/[(1 + c)n - 1]

P is the monthly payment required to make

The Taylors have purchased a $270,000 house. They made an initial down payment of $10,000

therefore net amount remaining =260000$

L =260000$( amount to be amortised)

n = no of months

c = monthly interest rate = 0.07/12 % =0.005834

amortage period =30 years =30*12 months =360 months

therefore n = 360

now , P = L[c(1 + c)n]/[(1 + c)n - 1], Puting values in the formula

P = 260000[0.005834(1.005834)^360 ] /[(1.005834)^360 -1] = 1729.92 $

P = 1729 $ and 92 cents

thus, the monthly payment that will the Taylors be required to make is 1729$ and 92 cents ..

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.