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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Question
suppose you are buying your first condo for 145,000 and you will make $15,000 down payment. you have arranged to finnace the remainder with a 30 year monthly payment amortized mortgage at a 55 nominal interest rate with first payment due in one month what will your monthly payments be? how much of first month payment is the prindipal
Expert Solution
Step 1: Introduction
Condo price = $ 145000
Down payment = $ 15000
Loan amount(P) = Condo price-Down payment
= 145000-15000
= $ 130000
Annual interest rate = 5.5%
Monthly interest rate (R) = 5.5%/12 = 0.458333
Period = 30 Years
Number of monthly payments (N) = 30*12 = 360
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