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A borrower has taken out a 30-year mortgage for $93,000 at an annual rate of 12%. a. Use the table to find the monthly payment for this mortgage. b. Construct the first three lines of an amortization schedule for this mortgage. c. Assume that the borrower has decided to pay an extra $50 per month to pay off the mortgage more quickly. Find the first three lines of your payment schedule under this assumption. 3 Click the icon to

A borrower has taken out a 30-year mortgage for $93,000 at an annual rate of 12%. a. Use the table to find the monthly payment for this mortgage. b. Construct the first three lines of an amortization schedule for this mortgage. c. Assume that the borrower has decided to pay an extra $50 per month to pay off the mortgage more quickly. Find the first three lines of your payment schedule under this assumption. 3 Click the icon to

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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### Mortgage Amortization Calculation A borrower has taken out a 30-year mortgage for $93,000 at an annual rate of 12%. #### Steps to Follow: 1. **Use the table to find the monthly payment for this mortgage.** 2. **Construct the first three lines of an amortization schedule for this mortgage.** 3. **Assume that the borrower has decided to pay an extra $50 per month to pay off the mortgage more quickly. Construct the first three lines of your payment schedule under this assumption.** ### Step 1: Finding Monthly Payments **a.** The monthly payments for this mortgage are \( \_\_\_\_\_\_ \). (Type an integer or a decimal.) ### Step 2: Amortization Schedule **b.** Construct the first three lines of an amortization schedule for this mortgage. *Round to the nearest cent as needed.* | Payment Number | Monthly Payment | Interest Paid | Paid on Principal | Balance | |----------------|-----------------|---------------|-------------------|-----------| | Month 1 | 1 | $ | $ | $ 93,000 | | Month 2 | 2 | $ | $ | $ | | Month 3 | 3 | $ | $ | $ | ### Step 3: Extra Payment Assumption **c.** Assume the borrower has decided to pay an extra $50 per month to pay off the mortgage more quickly. Construct the first three lines of the payment schedule under this assumption. *Round to the nearest cent as needed.* | Payment Number | Monthly Payment | Interest Paid | Paid on Principal | Balance | |----------------|-----------------|---------------|-------------------|-----------| | Month 1 | 1 | $ | $ | $ 93,000 | | Month 2 | 2 | $ | $ | $ | | Month 3 | 3 | $ | $ | $ | ### Step 4: Reference Table for Monthly Payment on $1,000 Loan #### Table Explanation: This table helps you find the monthly payment amount for loans of varying durations and interest rates. To use this table for the current problem, you can look under the 30-year column and go down to the 12% row to find the payment amount per $1,000
Transcribed Image Text:### Mortgage Amortization Calculation A borrower has taken out a 30-year mortgage for $93,000 at an annual rate of 12%. #### Steps to Follow: 1. **Use the table to find the monthly payment for this mortgage.** 2. **Construct the first three lines of an amortization schedule for this mortgage.** 3. **Assume that the borrower has decided to pay an extra $50 per month to pay off the mortgage more quickly. Construct the first three lines of your payment schedule under this assumption.** ### Step 1: Finding Monthly Payments **a.** The monthly payments for this mortgage are \( \_\_\_\_\_\_ \). (Type an integer or a decimal.) ### Step 2: Amortization Schedule **b.** Construct the first three lines of an amortization schedule for this mortgage. *Round to the nearest cent as needed.* | Payment Number | Monthly Payment | Interest Paid | Paid on Principal | Balance | |----------------|-----------------|---------------|-------------------|-----------| | Month 1 | 1 | $ | $ | $ 93,000 | | Month 2 | 2 | $ | $ | $ | | Month 3 | 3 | $ | $ | $ | ### Step 3: Extra Payment Assumption **c.** Assume the borrower has decided to pay an extra $50 per month to pay off the mortgage more quickly. Construct the first three lines of the payment schedule under this assumption. *Round to the nearest cent as needed.* | Payment Number | Monthly Payment | Interest Paid | Paid on Principal | Balance | |----------------|-----------------|---------------|-------------------|-----------| | Month 1 | 1 | $ | $ | $ 93,000 | | Month 2 | 2 | $ | $ | $ | | Month 3 | 3 | $ | $ | $ | ### Step 4: Reference Table for Monthly Payment on $1,000 Loan #### Table Explanation: This table helps you find the monthly payment amount for loans of varying durations and interest rates. To use this table for the current problem, you can look under the 30-year column and go down to the 12% row to find the payment amount per $1,000
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