Problem:
You plan to purchase a $175,000 house using a 15-year mortgage obtained from your local bank. The mortgage rate offered to you is 7.75%. You will make a down payment of 20% of the purchase price.
Required:
Question 1: Calculate your monthly payments on this mortgage.
Question 2: Calculate the amount of interest and, separately, principal paid in the 60th payment.
Question 3: Calculate the amount of interest and, separately, principal paid on the 180th payment.
Question 4: Calculate the amount of interest paid over the life of this martgage.
Note: Show all workings.