| You plan to purchase a $280,000 house using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is 7 percent. You will make a down payment of 10 percent of the purchase price. |
| a. | Calculate your monthly payments on this mortgage. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) |
| Monthly payment | $ |
| b. | Construct the amortization schedule for the first six payments. ( |
We have been provided with the information ,
You plan to purchase a $280,000 house using a
15-year mortgage
The mortgage rate offered to you is 7 percent.
You will make a down payment of 10 percent of the purchase price
So value =280,000
down payment = $ 28,000 (280,000*10%)
You will make a down payment of 28000 and borrow $252,000 through the mortgage.
a.
Calculate your monthly payments on this mortgage
Answer
For your mortgage:
$252,000
= PMT {[1 − (1/(1 + 0.07/12)^15(12))]/(0.07/12)}
or
PMT = $252,000/{[1 − (1/(1 + 0.07/12)^15(12))]/(0.07/12)}
therefore PMT = $ 2265.05
Thus, your monthly payment is $ 2265.05
B
Construct the amortization schedule for the first six payments
| Payment Month |
Monthly payment | Principal Payment | Interest Payment | Balance |
| Month 1 | $2,265.05 | $795.05 | $1,470.00 | $251,205.00 |
| Month 2 | $2,265.05 | $799.69 | $1,465.36 | $250,405.30 |
| Month 3 | $2,265.05 | $804.35 | $1,460.70 | $249,600.90 |
| Month 4 | $2,265.05 | $809.04 | $1,456.01 | $248,791.90 |
| Month 5 | $2,265.05 | $813.76 | $1,451.29 | $247,978.10 |
| Month 6 | $2,265.05 | $818.51 | $1,446.54 | $247,159.60 |
| You plan to purchase a $280,000 house using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is 7 percent. You will make a down payment of 10 percent of the purchase price. |
| a. | Calculate your monthly payments on this mortgage. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) |
| Monthly payment | $ |
| b. | Construct the amortization schedule for the first six payments. ( |
