Question

Suppose Cindy borrows $200,000 today using a 30-year fixed-rate mortgage with a 3.6% quoted interest rate...

Suppose Cindy borrows $200,000 today using a 30-year fixed-rate mortgage with a 3.6% quoted interest rate to buy a coop. She will make the first monthly payment one month from today. Her loan balance is $200,000 today.

1) What is her monthly mortgage payment?

2) What will be her loan balance after making the first monthly payment one month from today?

You should show all steps to find the answer to earn full credit.

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Homework Answers

Answer #1

PV = 200,000

n = 30 * 12 = 360

r = 3.6%/12 = 0.003

1) Monthly mortgage payment

Monthly mortgage payment is $909.2907005102

2) We need to find the present value of these monthly payments after making first monthly payment

n = 360 - 1 = 359

r = 3.6%/12 = 0.003

PMT = 909.2907005102

Her loan balance after making the first monthly payment one month from today is $199,690.7093146761

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