Question

Fifteen years ago a couple purchased a house for $130,000.00 by paying a 20 % down payment and financing the remaining balance with a 30-year mortgage at 7.76% compounded monthly. (a) Find the monthly payment for this loan. Monthly Payment: [Note: Your answer is a dollar amount and should have a dollar sign and exactly two decimal places.] (b) Find the balance of the loan after 17 years and after 18 years? After 17 years After 18 years n= n= Loan Balance: Loan Balance: [Note: Your answer for each loan balance should be a dollar amount and should have a dollar sign and exactly two decimal places.] (c) Find the total amount of interest paid by the couple during the 18th year. Interest Paid During 18th year: [Note: Your answer is a dollar amount and should have a dollar sign and exactly two decimal places.] Note: You can earn partial credit on this problem.

Answer 1

(a) Find the monthly payment for this loan. Monthly Payment:
=PMT(7.76%/12,12*30,-130000*(1-20%))=$745.79

(b) Find the balance of the loan after 17 years and after 18 years?
After 17 years
=FV(7.76%/12,12*17,745.79,-130000*(1-20%))=$73,135.05
After 18 years
=FV(7.76%/12,12*18,745.79,-130000*(1-20%))=$69,741.85

(c) Find the total amount of interest paid by the couple during the 18th year.
Interest Paid During 18th year:
=745.79*12-(73135.05-69741.85)=$5,556.28