Homework Answers
| Total Interest to be paid = Total Amount To Be Paid - (house price- down payment) | ||||||||||
| = (25 years *12 m *$1353.03 per m) - ($250000-40000) | ||||||||||
| =$405909 -$210000 | ||||||||||
| =$195909 | ||||||||||
| Equity After 10 years | ||||||||||
| = Price of house - outstanding loan after 10 years i.e. pv of future loan payment | ||||||||||
| = $250000 - P [1-(1+r)^-n]/r | ||||||||||
| Where, | ||||||||||
| p = Monthly payment | ||||||||||
| r= monthly interest rate i.e.0.06/12=0.005 | ||||||||||
| n= number of installment i.e. 15*12 =180 | ||||||||||
| =$250000 -[$1353.03[1-(1+0.005^-180]/0.005 | ||||||||||
| =$250000-160338.8 | ||||||||||
| $ 89,661.20 | ||||||||||
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