1. Say you bought a house for $275,000 with 10% down, and financed it from a bank for a 30-year term at 4.75% interest per year compounded monthly. If you paid an extra $1,000 every year (end of 12th month) along with the regular month-end payments, which will be true from the following?
You will be able to cut off 42 full payments and a partial payment from the loan.
You will have to make only 315 payments.
You will have to make 316 payments of $1,291.08 each, pay $1,000 at the end of the first 26 years, & make a 317th payment of $1,194.97.
You will have to make 316 paymnents of $1,291.08 each & make a 317th payment of $1,190.26.
2. How much will you owe at the end of the first year, if you bought a house for $175,000 with 10% down, financed from a bank that is willing to give you a 30-year loan at 4.5% interest per year compounded monthly? Payments are made at the end of each month.
$154,959
$152,302
$149,522
$136,754