Author Question: You just bought a home for 250,000 and are to make monthly payments of 1,834.41 for 30 years at 8 ... (Read 225 times)

bb · **on:** Jul 10, 2018

You just bought a home for 250,000 and are to make monthly payments of 1,834.41 for 30 years at 8 APR.

Suppose you add 298.44 each month to the 1,834.41 house payment making your monthly payment 2,132.85. This extra amount is applied to the principal. How long will it take you to pay off your loan of 250,000? Use a calculator to determine your answer.
A) It will take under 15 years.
B) It will take about 16 years.
C) It will take slightly over 19 years.
D) It will take slightly over 20 years.

Question 2

Assume you just bought a new home and now have a mortgage on the home. The amount of the principal is 150,000, the loan is at 5 APR, and the monthly payments are spread out over 30 years.

What is the loan payment? Use a calculator to determine your answer.
A) 798.95
B) 805.23
C) 850.32
D) 903.47

covalentbond · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

Answer: C
Explanation: C) With Mode of P/Y = 12 and C/Y = 12, I/Y = 8, PV = 250,000, PMT = -2,132.85, and FV = 0, we get n = 228.85 months or 19.07 years.

Answer to Question 2

Answer: B
Explanation: B) With Mode of P/Y = 12 and C/Y = 12, N = 360, I/Y = 5, PV = 150,000, and FV = 0, we get 805.23 as the monthly payment.