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,You buy a house at $180,000 and pay 20% down, taking out a 30 year mortgage at 5.5% APR 

 

How much would resulting morgage be?

180000*.20=36000

180000-36000=144000

144000*0.055(1*0.055)^360/((1.055)^360-1)=$792 Monthly Payment 

792*12=9504*30=$285,120.00 total paid ?

 

How much interest over the loan? 

285120-144000=141120.00?

 

How much equity would you have after 10 years? 

Instructor has not shown us how to get equity? SO I have no clue 

 

Suppose you put an extra $100 a month toward the payments. HOw much faster will you pay off the loan? 

I guess 10 years faster? just guessing at this point 

 

Referencing part d, how much interest will you save by paying the $100/month? 

 Apr 22, 2022
 #1
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You made a mistake in calculating your monthly payment. This is the formula you would use to calculate the monthly payment:

 

N=30*12; R=0.055/12;PV=144000; PMT=PV*R*((1 + R)^N) / ((1 + R)^(N) - 1)

MORTGAGE PMT =$ 817.62 -monthly

 

$817.62  x  360 months ==$294,343.20 - principal + interest paid over 30 years.

$294,343.20  -  $144,000 principal==$150,343.20 - total interest paid over 30 years.

 

Balance of the mortgage after 10 years==$118,859.03 

House equity after 10 years ==180,000 - $118,859.03 ==$61,140.97

 

If the mortgage payment was: $817.62 + $100==$917.62 - the mortgage would be paid off in 278 months==23 years and 2 months. So, the mortgage would be paid off some 82 months earlier, or about 6 years and 10 months earlier.

 Apr 23, 2022
 #2
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278 months  x  $917.62 ==$255,098.36 - principal + interest with the increased pmt. of $917.62

 

$294,343.20 - $255,098.36 ==$39,244.84 - interest saved with $100 extra paid every month over the life of the mortgage.

Guest Apr 23, 2022

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