Question

You plan to purchase an $140,000 house using a 30-year mortgage obtained from your local bank. The mortgage rate offered to you is 4 percent. You will make a down payment of 10 percent of the purchase price. a. Calculate your monthly payments on this mortgage. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Monthly payment $ b. Calculate the amount of interest and, separately, principal paid in the 230th payment. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) Amount of interest $ Amount of principal $ c. Calculate the amount of interest and, separately, principal paid in the 260th payment. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) Amount of interest $ Amount of principal $ d. Calculate the amount of interest paid over the life of this mortgage. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Amount of interest paid

Answer 1

A)
Purchased Price of Home	$140,000.00
Less: 10% down Payment	$14,000.00
Borrowed Amount	$126,000.00
Rate	0.33%
Period = 30 x 12	360
Monthly Payment = PMT(.33%,360,-126000)	$601.54
B)
Rate	0.33%
Period =	230
Num period	360
PV	$126,000.00
Principal = PPMT(.33%,230,360,-126000)	$388.99
Interest = IPMT(.33%,230,360,-126000)	$212.55
C)
Rate	0.33%
Period =	260
Num period	360
PV	$126,000.00
Principal = PPMT(.33%,260,360,-126000)	$429.83
Interest = IPMT(.33%,260,360,-126000)	$171.71
D)
amount of interest paid over the life of this mortgage
Total Payments = $601.54 x 360	$216,555.58
Less: Principal	$140,000.00
Total interest paid	$76,555.58