Supposed you need to borrow $120,000 for a home mortgage. If the bank requires the mortgage...
Supposed you need to borrow $120,000 for a home mortgage. If the bank requires the mortgage to be repaid at 9% interest over 30 years, what is your monthly payment? Over the life of the loan, how much total interest is paid?
Homework Answers
| Amount borrwed | 120000 | ||||
| Annual rate = 9% | |||||
| Monthly rate = 9/12 = 0.75% | |||||
| Divide: Annuity PVF at 0.75% for 360 periods | 124.2819 | ||||
| Monthly payment | 965.55 | ||||
| Monthly Payment | 965.55 | ||||
| Multiply: Number of periods | 360 | ||||
| Total Payments | 347598 | ||||
| Less: Amount borrowed | 120000 | ||||
| Total Interest paid | 227598 | ||||
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