Question

You just purchased a $400,000 house and gave a 20% down payment. For the remaining portion, you obtained a 30-year mortgage at a 6% interest rate. (6 points)
In ten years, how much equity will you have on this home?

Answer 1

Monthly Payment	Using PMT function in MS excel	pmt(rate,nper,pv,fv,type)   rate = 6%/12 =.5% nper =12*30 =360 pv = 320000 fv =0 type = 0	PMT(0.5%,360,320000,0,0)	($1,918.56)
Present value of monthly payment for 10 years
Present value	Using present value function in M S ecxel	PV(rate,nper,pmt,fv,type) rate = .5% nper = 120 pmt = 1918.56 fv = 0 type = 0	PV(8.5%,10,45,1000,0)	$172,811.32
Equity in home	(400000*20%)+172811	252811