Michael and Ashley have decided to buy a house for $240,000. They will make a 20% down payment, and they expect to be approved for a 30-year mortgage with an interest rate of 4.25%. Find their monthly payment.
Then, construct the first row of the amortization table for their mortgage. How much of their first payment goes toward interest? How much of their first payment goes toward principal? After making their first payment, what is the remaining balance?
Then, construct the second row of the amortization table for their mortgage. How much of their second payment goes toward interest? How much of their second payment goes toward principal?
After making their second payment, what is the remaining balance?
Finally, continue constructing the amortization table for their mortgage until you have completed 12 rows of the table. What is the total amount of interest that Michael and Ashley will pay on their mortgage in the first year?