fter 5 years, you decide not to use the money for a car. Instead, you'll take $10,000 to buy a house. You find a home you love for $375,000. a. Assuming that you get an interest rate of 5.75%, plan on taking about a 30- year mortgage, and you will put a down payment of $8,000, what will your monthly payment be? (hint: find PMT, and don't forget to take out the down payment!) b. Yikes! That payment is way too much! You want to have a mortgage payment of $1200. Assuming that you get an interest rate of 5.75%, plan on taking about a 20-year mortgage and a payment of $1200 each month how big of a mortgage
fter 5 years, you decide not to use the money for a car. Instead, you'll take $10,000 to buy a house. You find a home you love for $375,000. a. Assuming that you get an interest rate of 5.75%, plan on taking about a 30- year mortgage, and you will put a down payment of $8,000, what will your monthly payment be? (hint: find PMT, and don't forget to take out the down payment!) b. Yikes! That payment is way too much! You want to have a mortgage payment of $1200. Assuming that you get an interest rate of 5.75%, plan on taking about a 20-year mortgage and a payment of $1200 each month how big of a mortgage
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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Transcribed Image Text:7. After 5 years, you decide not to use the money for a car. Instead, you'll take $10,000
of it to buy a house. You find a home you love for $375,000.
a. Assuming that you get an interest rate of 5.75%, plan on taking about a 30-
year mortgage, and you will put a down payment of $8,000, what will your
monthly payment be? (hint: find PMT, and don't forget to take out the down
payment!)
b. Yikes! That payment is way too much! You want to have a mortgage payment
of $1200. Assuming that you get an interest rate of 5.75%, plan on taking about a
30-year mortgage, and a payment of $1200 each month, how big of a mortgage
should you get? (hint: find PV. Do NOT take out a down payment.)
c. After your findings in 5b, you aim for a $200,000 mortgage. Assuming you get
an interest rate of 5.75%, plan on taking about a 30-year mortgage, and the
mortgage is $200,000, how much will you pay over the life of the mortgage?
(hint: find the PMT first)
d. How much of that was interest if the loan was $200,000? (hint: use the PMT
and PV)
e. How much money could you have saved if you did a 15-year mortgage
instead? (hint: rerun the TVM)
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