A couple has just purchased a home for $354,000.00. They will pay 20% down in cash, and finance the remaining balance. The mortgage broker has gotten them a mortgage rate of 3.96% APR with monthly compounding. The mortgage has a term of 30 years. How much interest is paid in the first year?

A couple has just purchased a home for $354,000.00. They will pay 20% down in cash, and finance the remaining balance. The mortgage broker has gotten them a mortgage rate of 3.96% APR with monthly compounding. The mortgage has a term of 30 years. How much interest is paid in the first year?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

See similar textbooks

Related questions

Q: Suppose Allison purchases a condominium and secures a loan of $134,000 for 30 years at an annual…

A: Loan amount (X) = $134000 Number of payments (n) = 30 * 12 = 360 r = 6.5% per annum = 0.54167% per…

Q: a. Calculate the amount of interest and, separately, principal paid on each mortgage. What is the…

Q: Tomás bought a house with a mortgage of $328,300. The mortgage is being finance interest rate of…

A: loans are paid by the monthly payments and these payments carry the payment of loa amount and…

Q: A family has a $95,877, 25-year mortgage at 5.1% compounded monthly (A) Find the monthly payment and…

A: A written agreement through which a lender gets the right to take the property that is put as a…

Q: When you purchased your house, you took out a 30-year mortgage with an interest rate of 4.8% per…

A: Payoff amount refers to the amount which is required to be paid as principal amount of the loan. The…

Q: You have decided to refinance your mortgage. You plan to borrow whatever is outstanding on your…

A: In this problem we to find out total mortgage amount and mortgage payment done and get the remaining…

Q: Your friend has just arranged to purchase a $400,000 home with no down payment. The mortgage has a…

A: Value of home =$400,000 Interest Rate (r) = 3.5%/12 = 0.291667% Years = 30 Terms(n) = 30*12=360 Let…

Q: Tara has just bought a house for $930,000 with a 30% down payment and a 70% mortgage loan for 20…

A: Purchase Price = 930,000 Down Payment = 930,000*30% = 279,000 Loan Amount = Purchase Price - Down…

Q: You take out a 30-year $100,000 mortgage loan with an APR of 6% and monthly payments. In 12 years…

A: Principal balance Amount outstanding and owing for satisfying the payoff the amount of an underlying…

Q: 3) Find the monthly payment and the total intere Suppose the family decides to add an extra $ onthly…

A: Concept of Mortgage and amortization of Loan Calculation of Equalized Payment and Interest there on

Q: You have just purchased a home and taken out a $500,000 mortgage. The mortgage has a 30-year term…

A: Calculation of Total Interest Paid and Total Principal Paid during the 20th year:The total interest…

Q: Mr. and Mrs. Jones have taken out a mortgage loan of $195,000.00 from a bank at 5.5% APR for a fixed…

A: Formula to calculate monthly payments PMT=PV x i x (1+r)n(1+r)n-1 Where, PMT = Monthly payment n =…

Q: new house for $ 120,000. He was able to make a down payment equal to 25% of the value of the house;…

A: The given problem can be solved using PMT function in excel. PMT function computes installment…

Q: Roger and Susan are negotiating a mortgage on a new home. They have decided that the maximum…

A: Mortgage loans are secured loan and payble by easy monthly installments that carry the payment for…

Q: Ms. Tweeter is buying a house with a cost of $350,000. She will make a down payment of $20,000 on…

A: There are various ways through which one can obtain finance, one of them is through a mortgage loan.…

Q: You are a loan officer trying to structure a 5/25 ARM mortgage. The interest rate in the first 5…

A: A mortgage refers to a loan used for the purchase of real estate. The loan is covered by the real…

Q: 19. You borrow $1,500,000 to purchase a small apartment building. The lender charges you a 2%…

A: Present value of annuity Annuity is a series of equal payment at equal interval. With annuity (PMT),…

Q: What must be your annual quoted rate (APR)? After paying the loan for 5 years, you’re allowed to pay…

A: The annual rate of interest for a loan, often referred to as the annual interest rate or annual…

Q: A family has a $134,345, 25-year mortgage at 5.1% compounded monthly. (A) Find the monthly payment…

A: Mortgage is a loan to buy a property or asset. The mortgage repayment in equal amount is an annuity…

Q: You buy a house for $800,000. It is a 20 Year mortgage where the payments are made monthly. If the…

A: Amount of Loan = $800000 Years = 20 Terms(n1)=20*12 =240 Terms Remaining After 17 years = (20-17)*12…

Q: Dick and Jane Buell have purchased a home for $114,500. They will need to obtain a mortgage for 75%…

A: Price of Home =$114500 Amount Mortgage = 75% of Home Price = 75% *…

Q: Afamily has a $110,662, 15-year mortgage at 6% compounded monthly (A) Find the monthly payment and…

A: A mortgage is a type of covered loan provided for the purchase or maintenance of the real estate.…

Q: 15 What is their monthly payment? Roune How much will they pay over the cour $ With this payment,…

A: To determine the monthly payments we can use the PMT function in excel. The syntax is: PMT (rate,…

Q: A woman buys a house for $265,000. She pays $70,000 down and takes out a mortgage at 6.6% on the…

A: Mortgage amortization refers to a schedule which is prepared to shows the periodic loan payments,…

Q: You recently did your finances, and realize you can afford a monthly paymentof $3,220 for a house.…

A: Data given: Monthly payment (PMT)= $3,220 Rate=6.1% N=30 years Working Note#1 Calculation of…

Q: You purchase a home for $350 000. At the time of purchase you make a downpayment of $75 000. The…

A: Loan amount (L) = $350000 - $75000 = $275000 n = 25 years = 300 months Interest rate = 4.3%…

Q: You are looking to buy a $415,000.00 home in Haverhill. If Bank of America will give them a 30-year…

A: For the calculation I have used the above given formula and got the monthly payment to be…

Q: Your family recently bought a house. You have a $100,000, 30-year mortgage with a 6% nominal annual…

A: To calculate your monthly mortgage payment and how much of the first payment goes toward interest,…

Q: The amount that is borrowed on your house mortgage was $175,000 dollars to be repayed through…

A: An annuity is a series of cash flows for a particular period. In this series, each cash flow…

Q: The Joneses are interested in purchasing a house listed at $580,000 in Thunder Bay. They are…

A: Amortization refers to the systematic periodic repayment of mortgage amount spread over the…

Q: The Smiths are heir outstand a) Under their heir monthly r b) How much

A: Loan balance=$160000Period=15 yearsinterest rate=3.6%current monthly payment=$1515

Q: The Johnson family is interested in buying a home. The family is applying for a $200,000 30-year…

A: Here,MortgageAmount is $200,000Time Period of Mortgage is 30 yearsMortgage Rate is 7.5%

Q: Uncle Roger borrows $120,000 to buy a house on mortgage. The nominal annual interest rate on the…

A: The PMT function is a type of financial function which helps to determine the total monthly payment…

Q: u have decided to refinance your mortgage. You plan to borrow whatever is outstanding on your…

A: In case of a mortgage loan, a series of equal fixed periodic payment at equal interval over a…

Q: Max buys a $2,000,000 house and makes a $500,000 down payment. The mortgage is for 30 years at 4%…

A: Monthly payments is calculated by EMI formula i.e. present value of annuity formula. For calculation…

Q: John and Judy Jacobson have purchased a house for $450,000. They are putting 20% or $90,000 down…

A: Compound = Monthly = 12Present Value of Loan = pv = $360,000Time = t = 30 * 12 = 360Interest Rate =…

Q: You purchase a home for $400,000 and make a down payment of $125,000. The balance is borrowed and…

A: Using excel PMT function

Q: You take out a 20-year $280,000 mortgage loan with an APR of 6% and monthly payments. In 16 years…

A: Loan amount = $ 280,000 Annual interest rate = 6% Monthly rate = 6%/12 = 0.50% Loan period = 20…

Q: You have just purchased a home and taken out a $460,000 mortgage. The mortgage has a 30-year term…

A: We buy expensive or large ticket items like a home by taking a bank loan. The loan is repaid through…

Q: Johnny and Lucy have purchased a home for $365,000. They will need to obtain a mortgage for 85% of…

A: Loan amortization table shows the bifurcation of each monthly payment in the interest payment and…

Q: How much would Doug save in interest if he amortized his mortgage over 15 years, rather than 25…

A: An amortized loan is a type of loan that is repaid in regular fixed installments over a specified…

Q: n June 1, you borrowed $350,000 to buy a house. The mortgage interest rate is 3.5%. The loan is to…

A: Mortgage loans are secured loans paid by equal monthly installments and these monthly payment carry…

Q: A couple borrows 275000.00 for a mortgage that requires fixed monthly payments over 25 consecutive…

A: Solution:-When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: borrower has a 30-years mortgage loan for $400,000 with an interest rate of 6% and payments. If she…

A: Future value =Present value (1+r)n r=interest rate =6% Period =8years

Q: arnie and beth litner recently bought a house for $425,000. They put 10% down as a down payment and…

A: The answer to the given question has been provided below in a detailed manner along with all the…

Q: You have just purchased a home and taken out a $420,000 mortgage. The mortgage has a 30-year term…

A: MortgageA mortgage is a legal agreement in which a person borrows money from a financial institution…

Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Given information:

VIEW

Step 2: Calculation:

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

You have just purchased a home and taken out a $500,000 mortgage. The mortgage has a 30-year term with monthly payments and an APR of 6%. How much will you pay in interest, and how much will you pay in principal, during the first year?
A family has a $121,857, 15-year mortgage at 7.8% compounded monthly. (A) Find the monthly payment and the total interest paid. (B) Suppose the family decides to add an extra $100 to its mortgage payment each month starting with the very first payment. How long will it take the family to pay off the mortgage? How much interest will the family save?
A couple purchased their home for $280,000. They signed a 30 year mortgage at 5.28% interest compounded monthly. What is the monthly payment and the total amount of interest paid on this loan? If the couple puts 20% down towards the purchase of the house listed above, what is the new monthly payment and the total amount of interest paid on this new loan? How much money is saved per month and how much interest is saved?
A couple borrows 275000.00 for a mortgage that requires fixed monthly payments over 25 consecutive years. The first monthly payment is due in one month. If the interest rate on the mortgage is 4.00%, which of the following comes closest to the monthly payment?
You purchase a home and have a $200,000 mortgage for 20 years at 5%. Utilize an amortization schedule. What are the periodic annual payment required for the mortgage? What are the interest payment for the first year? What is the first year principal repayment What is the balance owed at the end of the first year? What are the interest paid on the principal repayment for the second year ? What is the balance owed at the end of the second year ? Why did the interest paid on the principal repayment change in the second year?
When you purchased your house, you took out a 30-year mortgage with an interest rate of 4.8% per year. The monthly payment on the mortgage $5,557. You have just made a payment and have now decided to pay off the mortgage by repaying the outstanding balance. What is the payoff amount if you have lived in the house for 20 years (so there are 10 years left on the mortgage)? Payoff amount is $____. (Round to the nearest dollar.)
When you purchased your house, you took out a 30-year mortgage with an interest rate of 4.8% per year. The monthly payment on the mortgage $1,500. You have just made a payment and have now decided to pay the mortgage off by repaying the outstanding balance. What is the payoff amount if you have lived in the house for 18 years (so there are 12 years left on the mortgage)? Payoff amount is $
You borrow $149,000 to buy a house. The mortgage rate is 7.5% and the loan period is 30 years. Payments are made monthly. If you pay for the house according to the loan agreement, how much total interest will you pay?
A couple take a 30-year home mortgage of $120,000 at 7.8% compounded monthly. They make their regular monthly payments for 5 years, then decide to pay $1000 per month. a. Find their regular monthly payment. b. Findtheunpaidbalancewhentheybeginpayingthe$1000. c. How many payments of $1000 will it take to pay off the loan? Give the answer correct to one decimal place. d. Use your answer to part(c)to find how much interest they save by paying the loan this way.
A family needs to take out a 15-year home mortgage loan of $170,000 through a local bank. Annual interest rates for 15-year mortgages at the bank are 3.5% compounded monthly. (a) Compute the family's monthly mortgage payment under this loan. (b) How much interest will the family pay over the life of the loan?
A family buys a home by taking out a 15-year fixed-rate mortgage of $240,000 at 4.3% interest. What is their monthly payment? Round their answer up to the next whole dollar. How much will they pay over the course of 15 years? With this payment, much interest will they pay over the life of the loan? Complete the first three lines of this amortization table, using the payment you found above. Round each entry in the table to the nearest cent. Payment Number Interest Payment Principal Payment Balance of Loan 1 2 3 Submit Question
You borrow $280,000 to buy a house. The mortgage rate is 4.5% and the loan period is 25 years. Payments are made monthly. If you pay the mortgage according to the loan agreement, how much total interest will you pay? please type out all of your work