Problem:
Assume that a piece of property is purchased for $200,000. A 20% down payment is made and the rest is financed through a 15-year mortgage loan with a 5¼ % annual interest rate, compounded monthly. The loan will be repaid in equal monthly payments.
Required:
Question 1: Calculate the monthly payments. What is the total interest paid through the life of the loan?
Note: Provide support for your rationale.