Question

The price of a condominium is ?$128,000. The bank requires a? 5% down payment and one point at the time of closing. The cost of the condominium is financed with a? 30-year fixed-rate mortgage at 6.5%.

a.??Find the required down payment.

b.??Find the amount of the mortgage.

c.??How much must be paid for the one point at? closing?

(Round to the nearest dollar as? needed.)

d.??Find the monthly payment? (excluding escrowed taxes and? insurance).

?(Round to the nearest dollar as? needed.)

e.??Find the total cost of interest over 30 years.

?(Round to the nearest dollar as? needed.)

Answer 1

		Price of condominium	$128,000
	a	Required down payment	$6,400	(128000*0.05)
	b	Amount of mortgage	$121,600	(128000-6400)
	c	Amount to be paid for the one point at closing	$1,280	(128000*0.01)
	d	Interest rate=6.5%
		Monthly interest=(6.5/12)%
		Number of months of payment=12*30=360
		Monthly payment	$768.59	(Using PMT function of excel with Rate=(6.5/12)%,Nper=360,PV=-121600)
		Monthly payment	$769
	e	Total payment over 30 years	$276,694	(769.59*360)
		Amount of mortgage	$121,600
		Total cost of interest over 30 years	$155,094	(276694-121600)