Question

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%?

$

Answer #1

a) The amount of loan is 90% 0f $ 257000 = $ 231300.

b) The formula used to calculate the fixed monthly
payment (P) required to fully amortize a loan of L dollars over a
term of n months at a monthly interest rate of r is P = L[r(1 +
r)^{n}]/[(1 + r)^{n} – 1] where P is the monthly
payment, r is the rate of interest per period and n is the number
of periods.

Here,L=231300, r=4.2/1200=0.0035 and n=30*12=360. Then,
P=(231300*0.0035)[(1.0035)^{360}]/
[(1.0035)^{360}-1] = 809.55*3.517674548/2.517674548 = $
1131.10 ( on rounding off to the nearest cent).

c) Here,L=231300, r=5.2/1200= 13/3000 and n=30*12=360. Then,
P=(231300*13/3000)[(1+13/3000)^{360}]/
[(1+13/3000)^{360}-1] = 1002.30*4.742809737/3.742809737= $
1270.09( on rounding off to the nearest cent).

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, 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 $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%?
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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, 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
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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, 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
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$
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, 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 $233,000 home. You plan to pay 5% as a down
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a) How much is the loan amount going to be?
$
b) What will your monthly payments be if the annual interest rate
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$
c) What will your monthly payments be if the annual interest rate
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