Algebra

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12.1
1. The periodic mortgage would be such that the present evaluate of the mortgage amount is equal to the loan amount. To find the monthly mortgage amount, we use the PV of annuity formula since monthly honorarium is the annuity and the PV is the loan amount. The PV of annuity is stipulation as
PV = PMT [(1 - (1 / (1 + i)^n)) / i]
Where
PV = loan amount
PMT = monthly mortgage payment
i = monthly interest rate
n = monthly periods
Using the above formula we calculate the monthly payments for the given rates and loan amount and time period
a. 6.25%, 15 year, $150,000
150,000 = PMT [(1-(1/(1+6.25%/12)^(15X12))/6.25%/12]
PMT = $1,286.13
come amount paid = 1,286.13 X 15 years X 12 months = 231,503.40
Loan amount = $150,000
Interest paid = 231,503.40-150,000 = $81,503.4
b. 6.25%, 15 years, 175,000
175,000 = PMT [(1-(1/(1+6.25%/12)^(15X12))/6.25%/12]
PMT = $1,500.49
aggregate amount paid = 1,500.49 X 15 x 12 =270,088.20
Loan amount = 175,000
Interest paid = 270,088.20 175,000 = 95,088.20
Doing the comparable way we are able to fill the table

Monthly compensation is
| |6.25% |6.50% |7% |
|Amount |15 |20 |30 |
| 150,000 |$1,286.13 |$1,118.36 |$997.95 |
| 175,000 |$1,500.49 |$1,304.75 |$1,164.28 |
| 200,000 |$1,714.85 |$1,491.15 |$1,330.



60 |

Total interest paid is
| |6.25% |6.50% |7% |
|Amount |15 |20 |30 |
| 150,000 |$81,504.17 |$118,406.33 |$209,263.35 |
| 175,000 |$95,088.20 |$138,140.72 |$244,140.57 |
| 200,000 |$108,672.23 |$157,875.11 |$279,017.80 |

2. Loan amount = 175,000-20,000=155,000. The rate is 6.75% and period is 25 years. Using the PV of annuity formula...If you want to get a intact essay, order it on our website: Orderessay



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