Question

The problem describes a debt to be amortized. (Round your answers to the nearest cent.)

A man buys a house for $360,000. He makes a $150,000 down payment and amortizes the rest of the purchase price with semiannual payments over the next 6 years. The interest rate on the debt is 9%, compounded semiannually.

(a) Find the size of each payment.
$  

(b) Find the total amount paid for the purchase.
$  

(c) Find the total interest paid over the life of the loan.
$

Answer 1

	Loan amount =	210000
	360000-150000
ans a)	we have to use financial calculator to solve this
	put in calculator -
	FV		0
	PV		-210000
	N	6*2	12
	I	9%/2	4.50%
	Compute PMT	$23,029.90
	size of each payment.=		$23,029.90
ans b)	amount paid for the purchase =
	23029.90*12	276358.8
	ans =			276358.80
ans c)	total interest paid over the life of the loan.
	276358.8-210000	66358.8
	answer =			66358.80