Question

1. You have just purchased your dream house on Hawai’i for $500,000. You have been charged...

1. You have just purchased your dream house on Hawai’i for $500,000. You have been charged an interest rate of 9% APR, compounded monthly, and have entered into a 30-year mortgage with the bank. What are your monthly payments? 2. What are the second month's principal payment and ending balance?

Homework Answers

Answer #1

Ans Monthly Payment : $4023.11

second month's principal payment = $273.11

second month's ending balance = $ 491953.77

P = Regular Payments
PV = Loan Amount
r = rate of interest
n = no of periods
P = r (PV)
1 - (1 + r )^-n
P = (9%/12)*500000
1 - (1 / (1 + 9%/12)^360))
P = 3750
0.932113993
P = 4023.11
Beginning Balance Interest Principal Ending Balance
1 500000.00 3750.00 273.11 495976.89
2 495976.89 3719.83 303.29 491953.77
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