Question

page 231 problems

1.You pan to purchase a $100,00 home using a 30-year mortgage obtained from your local credit union. The mortgage rate offered to you is 8.25%. You will make a down payment of 20 percent of the purchase price.

Calculate your monthly payments on this mortgage

Calculate the amount of interest and, separately, principal paid in the 25^th payment.

Answer 1

there is slight confusion in the data related to home price whether it is 10,000 or 100,000, so here I assumed 100,000

amount of loan=100000*(1-20%)=80000

your monthly payments on this mortgage=80000/((1-(1+(8.25%/12))^(-30*12))/(8.25%/12))=601.01

loan amount after 24 payments=601.01*((1-(1+(8.25%/12))^(-28*12))/(8.25%/12))=78673.39

amount of interest  paid in the 25th payment=78673.39*(8.25%/12)=540.88

amount of principal paid in the 25th payment=601.01-540.88=60.13

the above is answer..