Question

You want to buy a $205,000 home. You plan to pay 10% as a down payment,...

You want to buy a $205,000 home. You plan to pay 10% as a down payment, and take out a 30 year loan for the rest.

a) How much is the loan amount going to be?

$

b) What will your monthly payments be if the interest rate is 5%?

$

c) What will your monthly payments be if the interest rate is 6%?

$

Homework Answers

Answer #1

(a)-The loan amount

The loan amount = Purchase price of home – Down payment

= $205,000 – [$205,000 x 10%]

= $205,000 - $20,500

= 184,500

(b)-Monthly loan payment if the interest rate is 5.00%

Loan Amount (P) = $184,500

Monthly Interest Rate (n) = 0.416667% per month [5.00% / 12 Months]

Number of months (n) = 360 Months [30 Years x 12 Months]

Therefore, the Monthly Loan Payment = [P x {r (1 + r)n} ] / [(1 + r)n – 1]

= [$184,500 x {0.00416667 x (1 + 0.00416667)360}] / [(1 + 0.00416667)360 – 1]

= [$184,500 x {0.00416667 x 4.4677443}] / [4.4677443 – 1]

= [$184,500 x 0.0186156] / 3.4677443

= $3,434.58 / 3.4677443

= $990.44 per month

(c)-Monthly loan payment if the interest rate is 6.00%

Loan Amount (P) = $184,500

Monthly Interest Rate (n) = 0.50% per month [6.00% / 12 Months]

Number of months (n) = 360 Months [30 Years x 12 Months]

Therefore, the Monthly Loan Payment = [P x {r (1 + r)n} ] / [(1 + r)n – 1]

= [$184,500 x {0.005 x (1 + 0.005)360}] / [(1 + 0.005)360 – 1]

= [$184,500 x {0.005 x 6.0225752}] / [6.0225752 – 1]

= [$184,500 x 0.0301129] / 5.0225752

= $5,555.83 / 5.0225752

= $1,106.17 per month

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You want to buy a $258,000 home. You plan to pay 10% as a down payment,...
You want to buy a $258,000 home. You plan to pay 10% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to? b) What will your monthly payments be if the interest rate is 6%? c) What will your monthly payments be if the interest rate is 7%?
You want to buy a $245,000 home. You plan to pay 10% as a down payment,...
You want to buy a $245,000 home. You plan to pay 10% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? $ b) What will your monthly payments be if the interest rate is 5%? $ c) What will your monthly payments be if the interest rate is 6%? $
You want to buy a home for $207,000. Your plan to pay 10% as a down...
You want to buy a home for $207,000. Your plan to pay 10% as a down payment, and take out a 30 year loan for the rest. How much is the amount going to be? what will the monthly payments be if the interest rate is at 5%? What will your monthly payments be if the interest rate is 6%?
You want to buy a $209,000 home. You plan to pay 5% as a down payment,...
You want to buy a $209,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? b) What will your monthly payments be if the interest rate is 6%? c) What will your monthly payments be if the interest rate is 7%?
You want to buy a $231,000 home. You plan to pay 20% as a down payment,...
You want to buy a $231,000 home. You plan to pay 20% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? $ b) What will your monthly payments be if the interest rate is 5%? $ c) What will your monthly payments be if the interest rate is 6%? $
You want to buy a $213,000 home. You plan to pay 20% as a down payment,...
You want to buy a $213,000 home. You plan to pay 20% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? $ b) What will your monthly payments be if the interest rate is 5%? $ c) What will your monthly payments be if the interest rate is 6%?
You want to buy a $186,000 home. You plan to pay 15% as a down payment,...
You want to buy a $186,000 home. You plan to pay 15% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? $ b) What will your monthly payments be if the interest rate is 5%? $ c) What will your monthly payments be if the interest rate is 6%?
You want to buy a $247,000 home. You plan to pay 5% as a down payment,...
You want to buy a $247,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? $ b) What will your monthly payments be if the interest rate is 6%? $ c) What will your monthly payments be if the interest rate is 7%?
You want to buy a $247,000 home. You plan to pay 5% as a down payment,...
You want to buy a $247,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? $ b) What will your monthly payments be if the interest rate is 6%? $ c) What will your monthly payments be if the interest rate is 7%? $
You want to buy a $257,000 home. You plan to pay 10% as a down payment,...
You want to buy a $257,000 home. You plan to pay 10% as a down payment, and take out a 30 year fixed loan for the rest. Round all answers to the nearest cent as needed. a) How much is the loan amount going to be? $ b) What will your monthly payments be if the interest rate is 4.2%? $ c) What will your monthly payments be if the interest rate is 5.2%? $