A man buys a house for $175,000. He makes a $75,000 down payment and amortizes the rest of the debt with semiannual payments over the next 10 years. The interest rate on the debt is 12%, compounded semiannually. find: (a) the size of each payment, (b) the total amount paid over the life of the loan, and (c) the total interest paid over the life of the loan.

Answer 1

(a) The size of each payment is $14,945.

(b) The total amount paid over the life of the loan is $179,637.

(c) The total interest paid over the life of the loan is $4,637.