Question

A house costs $157,000. The fixed annual interest rate is 5.8% compounded monthly. You apply for a 30 year loan.

A) A down payment of 14% is required. What is your down payment? It will be $21980

B) How much is your mortgage? It will be $135,020.

C) What will be your monthly payment? I think it's $9106 because I did $157,000 (.058) and got the $9106. Correct me if I'm wrong

D) How much interest did you pay over the life of the loan?

E) After 30 years, how much have you paid for this house?

Answer 1

@mathmale one more!

Answer 2

Your responses to A and B are fine.

C is a considerably harder question to answer. Try doing an Internet search for "mortgage payment calculations." What you find will either offer you an online tool for doing this, or it will offer you a formula for calculating the fixed monthly payment, given a certain principal amount, interest rate and number of payments. In this problem your monthly payment hinges on the amount of the mortgage, NOT on the original price of the house.

D: You could use the Amount formula
\[A=P(1 + \frac{ r }{ n })^{nt}\]

Answer 3

to calculate the total of payments including principal and interest, represented by A.
Subtract P from A to answer this question.

Answer 4

E: Add together your down payment and (360 times the monthly payment).

Answer 5

I have to get offline. Hope these suggestions help you!

Answer 6

Down payment $21980
Monthly payment: $792.23
Interest paid 150,184.22
Total paid for life of loan $285,204.22

Answer 7

Mortgage amount was $135,020