You and your wife are planning to purchase a home in five (5) years. Your bank will provide you with an 80% LTV (loan to value) loan with the following terms: 20 (twenty) year term divided into MONTHLY payments of principal and interest. The interest rate is 10.50% compounded monthly.
How much money do you expect your new home to cost? VND________________
(YOU select a purchase price in VND.)
a) How much money is the bank willing to lend you? VND______________
b) If you start saving and investing today, how much must you save each month to accumulate the cash down payment you need in five years for your home? (The rate of return is 5.00% compounded monthly.) VND_____________
c) How much is the monthly payment of your home loan (Principal plus interest?) VND_____________
d) After you have paid the 180th payment, what is the BALANCE of the home loan?
VND_____________
e) How much of the 181st payment is paid to the lender as INTEREST, and how much of this payment is applied to reduce the home loan's PRINCIPAL balance?
Interest= ___________
Principal=___________