Question

20. You just purchased a $300,000 condo in New York City and have made a down payment of $60,000. You can amortize the balance at 3% per annual compounded monthly for 30 years. What are your monthly payments on the loan?

A. $1000.64

B. $1011.85

C. $1264.81

D. $1317.23

ANSWER: B

21. From the previous question #20, what is the balance after the first payment?

A. $223,659.50

B. $239,588.15

C. $364,266.00

D. None of above

* HAVE THE ANSWER FOR 20 BUT NEED FOR QUESTION 21*

Answer 1

20)

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

Where,

EMI= Equal Monthly Payment

P= Loan Amount

R= Interest rate per period =3%/12 =0.25%

N= Number of periods =30*12 =360

= [ $240000x0.0025 x (1+0.0025)^360]/[(1+0.0025)^360 -1]

= [ $600( 1.0025 )^360] / [(1.0025 )^360 -1

=$1011.85

Correct Option :B. $1011.85

21)

Interest for first month = $240000*3%/12 =600

Principal paid =$1011.85-600 =$411.85

Balance after fisrt payment =$240000-$411.85

=$23958.15