Question

You want to buy a house that costs $200,000 and have saved up enough for the 10% down payment. You will be borrowing the rest from the bank at an annual rate of 9% compounded s.a. through a 25 year mortgage.

• How much will your monthly payments be?
• How much of the first monthly payment will go towards principal?
• What will be the total cost of your house?

How much remains owing at the end of the 3 years, and what percentage of your first 36 payments went to principal?

Answer 1

	Amount borrowed	180000
1	Monthly payments	$1,510.55
2	Amount towards principal	$160.55
3	Total cost of the house	48166.04
4	Principal Amount paid in 3 years	-6607.21
	Balance remaining after 3 years	173392.79
5	% towards principal	12.15%

Workings

AutoSave o 9.3HD Book1 - Excel Sign in - 0 X File Home Insert Draw Page Layout Formulas Data Review View Help Tell me what you want to do Share Comments - 11 A = = 0 insert şi 49 O Calibri BIU - B -A A = E Paste La- - General 3$ -% Number Conditional Format as Formatting Table - . Delete - Format Cell Styles Sort & Find & Filter - Select Editing Clipboard Font Alignment Styles Cells А В Amount borrowed 1 Monthly payments =200000*90% =-PMT(9%/12,25*12,200000*90%) 2 Amount towards principal =D2-D1*9%/12 3 Total cost of the house =D4*25*12 4 Principal Amount paid in 3 years =CUMPRINC(9%/12,25*12,180000,1,36,0) Balance remaining after 3 years =180000+08 5 % towards principal =-D8/(36*D2) 17 Sheet1 Ready E + 100% -- - ENG 5:23 AM 100 Loe xiwi ^ D 0