Question

Jacson purchased a house for Birr 50,000. He made an amount of down payment and pay monthly Birr 600 to retire the mortage for 20 years at annual interest rate of 24% compounded monthly.
Find mortage
down payment
interest charged
percentage of down payment to selling price.

Answer 1

Present worth of 600 monthly for 20 years at APR=24%:

P=A*(P/A, 2%, 480)
=600*(1.02^480-1)/[(.02)(1.02^480)]
=29,997.766

Therefore down-payment
=50000-P
=50000-29,997.766
=20,002.23

Interest charged
=future value - present value
=29997.766*[(1.02^480)-1]
=402,845.97
(no interest paid on down-payment).

I'll leave the calculation of percentage of down-payment to selling price to you.

Answer 2

P = (Po*r*t)/(1-(1+r)^-t.

P = 600 * 240 = 144,000

X = Down payment.

Po = 50,000-x

r = 0.24/12 = 0.02/mo.

t = 20 * 12 = 240 mo.

144,000 = (50,000-x)*0.02*240)/(1-(1.02)^(-240))

X = 20,258.87

Po = 50,000-20,258.87 = 29,741.13

I = P-Po

Answer 3

What about the mortgage?