SOLUTION: suppose your parents are interested in buying a house that will cost $ 180000. they will use the equity in their present house to make a 20% down payment on the new house and finan
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Question 1102537: suppose your parents are interested in buying a house that will cost $ 180000. they will use the equity in their present house to make a 20% down payment on the new house and finance the rest with a 30 - year loan at an intrest rate of 6.5% compunded monthly.what will the monthly payment be ? and how much interest will be paid? Answer by Theo(13342) (Show Source):
present value = 144,000
future value = 0
number of years = 30
interest rate = 6.5% compounded monthly.
what is the monthly payment.
you translate number of year to number of months = 30 * 12 = 360.
you translate interest rate of 6.5% per to 6.5 / 12 = .54166666667% per month.
use a financial calculator such as the TI_BA II.
enter:
pv = -144000
pmt - 0
fv = 0
n =360
i/y = 6.5/12 = .54166666667
set pmts to end of time period.
calculate pmt to get pmt = 910.1779538 made at the end of each month for 360 months.
multiply this by 360 to get total payments of 327,664.0634
total interest paid = this minus 144,000 = 183,664.0634
