document.write( "Question 1188460: Two people purchase a $90000 house using a down payment of $20000. They can amortize the balance at 5% over 30 years. What is the monthly payments, total interest paid, equity after 5 years, and equity after 25 years? \n" ); document.write( "
Algebra.Com's Answer #819594 by Theo(13342)![]() ![]() You can put this solution on YOUR website! the purchase price of the house is 90,000. \n" ); document.write( "the down payment is 20,000. \n" ); document.write( "the amount that needs to be amortized is 70,000.\r \n" ); document.write( "\n" ); document.write( "using the ti-ba-ii business analyst calculator, i get:\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "monthly payments are 375.7751361.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "the sum of those payments is equal to 360 * that = 135,279049.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "the total interest paid is that minus 70,000 = 65,279.049.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "the total equity paid after 5 years would be present value of those payments for the remainder of the loan from that point.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "end of 5 years is the end of 5 * 12 = 60 months. \n" ); document.write( "remaining number of months is 360 - 60 = 300 \n" ); document.write( "present value of payments of 375.75771361 for 300 months = 64,280.11246. \n" ); document.write( "equity after 5 years is 70,000 - 64,280.11246 = 5,719.88754.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "end of 25 years is the end of 25 * 12 = 300 months. \n" ); document.write( "remaining number of months is 360 - 300 = 60. \n" ); document.write( "present value of payrmnets of 375.75771361 for 60 months = 19,912.58988. \n" ); document.write( "equity after 25 years is 70,000 - 19,912.58988 = 50,087.41012.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "the month by month transactions can be seen in the following excel displays for the critical months (beginning of loan period, end of 5 years, end of 25 years, end of loan period).\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( " ![]() \n" ); document.write( " \n" ); document.write( "\n" ); document.write( " ![]() \n" ); document.write( " \n" ); document.write( "\n" ); document.write( " ![]() \n" ); document.write( " \n" ); document.write( "\n" ); document.write( " ![]() \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "you can duplicate the results i got from my ti-ba-ii calculator by using the online financial calculator at https://arachnoid.com/finance/index.html\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "the results from using that calculator are shown below:\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( " ![]() \n" ); document.write( " \n" ); document.write( "\n" ); document.write( " ![]() \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "built up equity after 5 years = 70,000 - 64,280.92 = 5,719.08.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( " ![]() \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "built up equity after 25 years = 70,000 - 19,912.85 = 50,087.15.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "these results are slightly different than what i got using the ti-ba-ii. \n" ); document.write( "the difference is in the rounding of intermediate results. \n" ); document.write( "the online calculator displays results to the nearest penny and uses those rounded results in the following calculations. \n" ); document.write( "the ti-ba-ii uses the internally stored results that are unrounded.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "the difference between the two is very small at the end.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "for equity in the account after 5 years, ti-ba-ii allows me to get 5,719.88754, while online financial calculator allows me to get 5,719.08\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "for equity in the account after 25 years, ti-ba-ii allows me to get 50,087.41012, while online financial calculator allows me to get 50,087.15\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "this can also be done using your calculator and formulas. \n" ); document.write( "i haven't shown you those, but can do so if you need them. \n" ); document.write( "the results from the formulas should match the results from the ti-ba-ii because there will be no intgermediate rounding of results.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "let me know if you have any questions.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "theo \n" ); document.write( " |