1) Without using financial calculator, how one find out what payment would be for $250,000 loan with no first payment, amortized over 30 years (360 months) at 6% nominal annual interest. How to compute monthly payment and total payment amount over life of loan?
2) Suppose that you now purchased a house (with the loan described above) this month. Every Christmas you receive $10,000 from a rich relative. So you plan to pay an extra (in addition to the normal monthly payment) $10,000 on your mortgage next January and every January thereafter. Enter the previous loan information and make the start of the mortgage this month. Enter “$10,000” for the additional payment and specify that you will make this payment once annually. The start of the additional payment will be the next January. What is the average monthly payment under the plan? How long will it take to pay off the loan? How much money do you save in interest over the loan?