f you took a home mortgage loan of $150,000 for 30 years at 8.4%, compounded monthly, your monthly payments would be $1142.76. Suppose after 2 years you had an additional $2000. Would you save more over the life of the loan by paying an extra $2000 (one-time) with your 24th payment or by paying $1160 per month beginning with the 25th payment? To help you answer this question, complete the following. (a) Find the unpaid balance after 24 payments (b) Determine how long it takes to pay off the loan with the regular $1142.76 payments and the additional $2000 payment. Then find the total interest paid. (c) Determine how long it takes to pay off the loan without the additional $2000 payment, but with monthly payments of $1160 from the 25th payment. Then find the total interest paid. (d) Which payment method costs less?
f you took a home mortgage loan of $150,000 for 30 years at 8.4%, compounded monthly, your monthly payments would be $1142.76. Suppose after 2 years you had an additional $2000. Would you save more over the life of the loan by paying an extra $2000 (one-time) with your 24th payment or by paying $1160 per month beginning with the 25th payment? To help you answer this question, complete the following. (a) Find the unpaid balance after 24 payments (b) Determine how long it takes to pay off the loan with the regular $1142.76 payments and the additional $2000 payment. Then find the total interest paid. (c) Determine how long it takes to pay off the loan without the additional $2000 payment, but with monthly payments of $1160 from the 25th payment. Then find the total interest paid. (d) Which payment method costs less?
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
Related questions
Question
If you took a home mortgage loan of $150,000 for 30 years at 8.4%, compounded monthly, your monthly payments would be $1142.76. Suppose after 2 years you had an additional $2000. Would you save more over the life of the loan by paying an extra $2000 (one-time) with your 24th payment or by paying $1160 per month beginning with the 25th payment? To help you answer this question, complete the following.
(a) Find the unpaid balance after 24 payments
(b) Determine how long it takes to pay off the loan with the regular $1142.76 payments and the additional $2000 payment. Then find the total interest paid.
(c) Determine how long it takes to pay off the loan without the additional $2000 payment, but with monthly payments of $1160 from the 25th payment. Then find the total interest paid.
(d) Which payment method costs less?
Transcribed Image Text:Document1 - Word
困
File
Home
Insert
Design
Layout
References
Mailings
Review
View
O Tell me what you want to do...
& Share
X Cut
Calibri (Body) -11
A A Aa -
AL T
O Find -
AaBbCcDd AaBbCcDd 1 AAE 1.1 AAl AaB AaBbCcD AaBbCcDd AaBbCcDd AABBCCDI AaBbCcDc AaBbCcDd
E Copy
aac Replace
Paste
I U - abe X, x A - aly , A
I Normal
1 No Spac. Heading 1 Heading 2
Title
Subtitle
Subtle Em. Emphasis
Strong
Intense E...
Quote
V Format Painter
A Select -
Clipboard
Font
Paragraph
Styles
Editing
... |: . . 1.. I.
2 ... I 3
.. I ...
4 . . . 5 . . . I . 6.
I.. 7
Code 2:
. If you took a home mortgage loan of $150,000 for 30 years at 8.4%, compounded monthly, your
monthly payments would be $1142.76. Suppose after 2 years you had an additional $2000. Would
you save more over the life of the loan by paying an extra $2000 (one-time) with your 24th payment
or by paying $1160 per month beginning with the 25th payment? To help yo
complete the following.
answer this question,
(a) Find the unpaid balance after 24 payments
(b) Determine how long it takes to pay off the loan with the regular $1142.76 payments and the
additional $2000 payment. Then find the total interest paid.
2.
(c) Determine how long it takes to pay off the loan without the additional $2000 payment, but with
monthly payments of $1160 from the 25th payment. Then find the total interest paid.
(d) Which payment method costs less?
Page 1 of 1
147 words
E English (United States)
100%
9:05 AM
O Type here to search
a ) J ENG
6/3/2021
Transcribed Image Text:Document1 - Word
困
File
Home
Insert
Design
Layout
References
Mailings
Review
View
O Tell me what you want to do...
& Share
X Cut
Calibri (Body) -11
A A Aa -
AL T
O Find -
AaBbCcDd AaBbCcDd 1 AAE 1.1 AAl AaB AaBbCcD AaBbCcDd AaBbCcDd AABBCCDI AaBbCcDc AaBbCcDd
E Copy
aac Replace
Paste
I U - abe X, x A - aly , A
I Normal
1 No Spac. Heading 1 Heading 2
Title
Subtitle
Subtle Em. Emphasis
Strong
Intense E...
Quote
V Format Painter
A Select -
Clipboard
Font
Paragraph
Styles
Editing
... |: . . 1.. I.
2 ... I 3
.. I ...
4 . . . 5 . . . I . 6.
I.. 7
Code 2:
. If you took a home mortgage loan of $150,000 for 30 years at 8.4%, compounded monthly, your
monthly payments would be $1142.76. Suppose after 2 years you had an additional $2000. Would
you save more over the life of the loan by paying an extra $2000 (one-time) with your 24th payment
or by paying $1160 per month beginning with the 25th payment? To help yo
complete the following.
answer this question,
(a) Find the unpaid balance after 24 payments
(b) Determine how long it takes to pay off the loan with the regular $1142.76 payments and the
additional $2000 payment. Then find the total interest paid.
2.
(c) Determine how long it takes to pay off the loan without the additional $2000 payment, but with
monthly payments of $1160 from the 25th payment. Then find the total interest paid.
(d) Which payment method costs less?
Page 1 of 1
147 words
E English (United States)
100%
9:05 AM
O Type here to search
a ) J ENG
6/3/2021
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!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 7 images
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.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education