In 1980 Isabella purchased a home at a price of $152,900. She made a 20% cash down payment and borrowed the rest with a 30-year fixed-rate mortgage with monthly payments at an APR of 16.04% compounded monthly (that was the average mortgage rate in 1980!). 10. What was her monthly payment? 11. How much of the 1st monthly payment went towards principal? 12. Suppose it is 22.5 years later and Tara has made 75% of the payments (i.e., she just made her 270th payment). What percent of the original $122,320 principal has she paid?1 13. How much principal and interest are paid during the 26th year of the mortgage (payments #301 through #312)? Hint: there is an easier way to solve than calculating the principal and interest paid in each of the 12 payments and summing. On Canvas, enter only principal paid. Principal paid: Interest paid:
In 1980 Isabella purchased a home at a price of $152,900. She made a 20% cash down payment and borrowed the rest with a 30-year fixed-rate mortgage with monthly payments at an APR of 16.04% compounded monthly (that was the average mortgage rate in 1980!). 10. What was her monthly payment? 11. How much of the 1st monthly payment went towards principal? 12. Suppose it is 22.5 years later and Tara has made 75% of the payments (i.e., she just made her 270th payment). What percent of the original $122,320 principal has she paid?1 13. How much principal and interest are paid during the 26th year of the mortgage (payments #301 through #312)? Hint: there is an easier way to solve than calculating the principal and interest paid in each of the 12 payments and summing. On Canvas, enter only principal paid. Principal paid: Interest paid:
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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In 1980 Isabella purchased a home at a price of $152,900. She made a 20% cash down payment
and borrowed the rest with a 30-year fixed-rate mortgage with monthly payments at an APR of
16.04% compounded monthly (that was the average mortgage rate in 1980!).
10. What was her monthly payment?
11. How much of the 1st monthly payment went towards principal?
12. Suppose it is 22.5 years later and Tara has made 75% of the payments (i.e., she just made
her 270th payment). What percent of the original $122,320 principal has she paid?1
13. How much principal and interest are paid during the 26th year of the mortgage (payments
#301 through #312)? Hint: there is an easier way to solve than calculating the principal and
interest paid in each of the 12 payments and summing. On Canvas, enter only principal paid.
Principal paid:
Interest paid:
1 Be hopefully you won’t have to take out a mortgage at rates similar to the early 1980’s like
your grandparents might have done; and if you do, refinance as soon as interest rates drop!
$
(to nearest $0.01)
%
(to nearest 0.001%)
$
(to nearest $0.01)
$
(both to nearest $0.01)
$
and borrowed the rest with a 30-year fixed-rate mortgage with monthly payments at an APR of
16.04% compounded monthly (that was the average mortgage rate in 1980!).
10. What was her monthly payment?
11. How much of the 1st monthly payment went towards principal?
12. Suppose it is 22.5 years later and Tara has made 75% of the payments (i.e., she just made
her 270th payment). What percent of the original $122,320 principal has she paid?1
13. How much principal and interest are paid during the 26th year of the mortgage (payments
#301 through #312)? Hint: there is an easier way to solve than calculating the principal and
interest paid in each of the 12 payments and summing. On Canvas, enter only principal paid.
Principal paid:
Interest paid:
1 Be hopefully you won’t have to take out a mortgage at rates similar to the early 1980’s like
your grandparents might have done; and if you do, refinance as soon as interest rates drop!
$
(to nearest $0.01)
%
(to nearest 0.001%)
$
(to nearest $0.01)
$
(both to nearest $0.01)
$
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