You just found the house of your dreams. The price of the house is $400,000. You have been qualified to get a mortgage loan with AAA Bank. The mortgage loan is for 20 ears at an annual interest rate of 36%. Please show formulas and work.
A. How much are your monthly payments?
-How many periods (the value of n) do we need to use in computing PMT
-What is the rate per period to use in solving the monthly payments for the mortgage loan
B. What is the balance of the mortgage loan after 1 year of payment?
-To compute the balance of the mortgage loan after 1 year, what is thhe value of n
C. After 1 year of payment, you want to add extra money to the monthly payments so that you will be able to pay off mortgage loan in 5 years. How much do you add to your previously computed monthly payments in order to accomplish this?
- What is the value of n in the calculations of the new monthly payments
-How much are the new monthly payments in order to payy off loan in 5 years.