You want to buy a $169,000 home. You plan to pay 20% as a down payment, and take out a 30 year loanat 4.85% interest for the rest.a) How much is the loan amount going to be?$b) What will your monthly payments be?$c) How much total interest do you pay?$d) Suppose you want to pay off the loan in 15 years rather than 30. What will your monthly payment be?$e) How much money in interest will you save if you finance for 15 years instead of 30 years?$

Cost of home = $169,000Down payment = 20%Interest rate = 4.85%Number of years = 30 years

You want to buy a $169,000 home. You plan to pay 20% as a down payment, and take out a 30 year loan at 4.85% interest for the rest. a) How much is the loan amount going to be? $ b) What will your monthly payments be? $ c) How much total interest do you pay? $

You want to buy a $169,000 home. You plan to pay 20% as a down payment, and take out a 30 year loan at 4.85% interest for the rest. a) How much is the loan amount going to be? $ b) What will your monthly payments be? $ c) How much total interest do you pay? $

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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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

You want to buy a $169,000 home. You plan to pay 20% as a down payment, and take out a 30 year loan
at 4.85% interest for the rest.
a) How much is the loan amount going to be?
$
b) What will your monthly payments be?
$
c) How much total interest do you pay?
$
d) Suppose you want to pay off the loan in 15 years rather than 30. What will your monthly payment be?
$
e) How much money in interest will you save if you finance for 15 years instead of 30 years?
$

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