Question

The problem describes a debt to be amortized. (Round your answers to the nearest cent.)

A man buys a house for $390,000. He makes a $150,000 down payment and amortizes the rest of the purchase price with semiannual payments over the next 9 years. The interest rate on the debt is 13%, compounded semiannually.

(a) Find the size of each payment.
$

(b) Find the total amount paid for the purchase.
$

(c) Find the total interest paid over the life of the loan.
$

Answer 1

price of house is $390,000.

$150,000 down payment

so loan amount is

L=390000-150000

L= 240000

r=13% = 0.13

t=9 years

n=2 for semiannual payments

PMT=?

................the size of each payment.

.

.

.

.

.total amount paid is

.................total amount paid

.

.

.

.

the total interest is

...............the total interest paid