Algebra

[pic] 12.1 1. The hitchic mortgage would be such that the present estimate of the mortgage arrive is equal to the impart amount. To find the periodic mortgage amount, we use the PV of annuity formula since monthly wages is the annuity and the PV is the loan amount. The PV of annuity is stipulation as PV = PMT [(1 - (1 / (1 + i)^n)) / i] Where PV = loan amount PMT = monthly mortgage payment i = monthly interest rate n = monthly periods Using the preceding(prenominal) formula we calculate the monthly payments for the given rates and loan amount and time period a. 6.25%, 15 year, $150,000 150,000 = PMT [(1-(1/(1+6.25%/12)^(15X12))/6.25%/12] PMT = $1,286.13 come amount paid = 1,286.13 X 15 years X 12 months = 231,503.40 Loan amount = $150,000 Interest paid = 231,503.40-150,000 = $81,503.4 b. 6.25%, 15 years, 175,000 175,000 = PMT [(1-(1/(1+6.25%/12)^(15X12))/6.25%/12] PMT = $1,500.49 mass amount paid = 1,500.49 X 15 x 12 =270,088.20 Loan amount = 175, 000 Interest paid = 270,088.20 175,000 = 95,088.20 Doing the comparable route we are able to fill the table Monthly wages is | |6.25% |6.50% |7% | |Amount |15 |20 |30 | | 150,000 |$1,286.13 |$1,118.36 |$997.95 | | 175,000 |$1,500.49 |$1,304.75 |$1,164.28 | | 200,000 |$1,714.85 |$1,491.15 |$1,330.

60 | Tot al interest paid is | ! |6.25% |6.50% |7% | |Amount |15 |20 |30 | | 150,000 |$81,504.17 |$118,406.33 |$209,263.35 | | 175,000 |$95,088.20 |$138,140.72 |$244,140.57 | | 200,000 |$108,672.23 |$157,875.11 |$279,017.80 | 2. Loan amount = 175,000-20,000=155,000. The rate is 6.75% and period is 25 years. Using the PV of annuity formula...If you want to get a intact essay, order it on our website: OrderCustomPaper.com

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