Question

Frodo is going to buy a new house for $304,000. The bank will offer a loan for the total value of the house at 7.6% APR for 20 years. What will be the monthly payment for this mortgage?

To answer this question which calculator will you use?

Systematic Savings - Find total saved with a monthly deposit |
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Systematic Savings - Find monthly deposit to achieve a savings goal |
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Loan - Find monthly payment for a loan |
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Loan - Find loan amount that has a specific monthly payment |

Round your answers to the nearest penny

What will be the monthly payment for this mortgage?

How much will Frodo actually pay for the house with this monthly payment over these 20 years?

How much interest will Frodo pay for this mortgage?

Use the following info to answer the rest:

After years of monthly payments Frodo wants to refinance the mortgage with a new % APR for years mortgage. Use a amortization of the loan on a spreadsheet to answer these questions. Be sure to copy down for 120 payments (at a minimum).

Use a Amortization Spreadsheet to answer this question.

What will the principle of a "new" loan after making 120 payments on the first loan?

To save some time, the loan Calculator you would have found that the new Monthly Payments would be $2308.23 per month. After paying $2467.63 per month for the first 120 payments of the first loan and then paying $2308.23 per month for the last 120 payments of the second loan, how much did Frodo pay for this house?

How much of this would be the interest paid for the entire mortgage?

How much money did Frodo save by refinancing this mortgage?

Answer #1

1.

Loan - Find monthly payment for a loan

2.

=304000*(7.6%/12)/(1-1/(1+7.6%/12)^(12*20))=2467.6253808254

3.

=304000*(7.6%/12)/(1-1/(1+7.6%/12)^(12*20))*12*20=592230.091398096

4.

=304000*(7.6%/12)/(1-1/(1+7.6%/12)^(12*20))*12*20-304000=288230.091398096

5.

=FV(7.6%/12,120,PMT(7.6%/12,12*20,-304000),-304000)=206973.289807834

6.

=2467.63*120+2308.23*120=573103.2

7.

=2467.63*120+2308.23*120-304000=269103.2

8.

=(304000*(7.6%/12)/(1-1/(1+7.6%/12)^(12*20))*12*20-304000)-(2467.63*120+2308.23*120-304000)=19126.8913980959

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