Question

Part III: Mathematics of Finance

You have just graduated from college and landed your first big job. You have always dreamed of being a homeowner, and after carefully shopping for your dream home, you find one that you would like to purchase at a cost of $250,000. After researching banks to find the best interest rate, you find that Banks for Homeowners offers the best rate of 6% interest that compounds monthly for 30 years.

•What is the monthly payment for this loan?
•What is the unpaid balance of the loan at the end of 5 years?
•What is the unpaid balance at the end of the 10th year?

Answer 1

what is your down payment? 20% ($50,000) or less

Answer 2

•What is the monthly payment for this loan? $1,498.88
•What is the unpaid balance of the loan at the end of 5 years? $229,200.00
•What is the unpaid balance at the end of the 10th year? $204,580.00