Question

A man buys a house for $310,000. He makes a $150,000 down payment and amortizes the rest of the debt with semiannual payments over the next 8 years. The interest rate on the debt is 11%, compounded semiannually.

(a) Find the size of each payment.

(b) Find the total amount paid over the life of the loan (including the down payment).

(c) Find the total interest paid over the life of the loan.

Answer 1

Update:

I've got parts a and c correct! But I'm still having difficulty with part b - I multiplied the answer from part a with the number of years and then added the down payment, but that isn't correct. I'm not really sure what I'm doing wrong.

Answer 2

Update #2:

I've figured it out! You're supposed to multiply the answer from part a with whatever the n value is (in this case it's 16 because 8x2), and then you add the down payment. Thanks to anyone who considered this question! Haha

Answer 3

I wonder