Question

You can afford a $1400 per month mortgage payment. You've found a 30 year loan at 6% interest. a) How big of a loan can you afford? $ b) How much total money will you pay the loan company? $ c) How much of that money is interest? $

Answer 1

Ans

P =	Regular Payments
PV =	Loan Amount
r =	rate of interest
n =	no of periods
P =	r (PV)
	1 - (1 + r )-n
1400 =	(6%/12)*P
	1 - (1 / (1 + 6%/12)^360))
1400 =	0.005 * P
	0.833958072
P =	1400 * 0.833958072 / 0.005
P =	233508.26
a) LOAN AMOUNT =	233508.26
b) TOTAL MONEY PAYABLE =	EMI * NO OF PERIODS
	1400 * 360
	504000
c) INTEREST =	TOTAL MONEY PAYABLE - LOAN AMOUNT
	504000 - 233508.26
	270491.74