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:You plan to use a 15 year mortgage obtained from a local bank to
purchase a house worth $124,000.00. The mortgage rate offered
to you is 7.75%. You will make a down payment of 20% of the
purchase price.
a. Calculate your monthly payments on this mortgage.
List in a spreadsheet the cash flow the bank expects to receive
from you.
Submit the spreadsheet with your answers.
b. Calculate the amount of interest and principal for the 60th
payment. Show your work.
c. Calculate the amount of interest and principal to be paid on the
180th payment. Show your work.
d. What is the amount of interest paid over the life of this
mortgage?
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