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You have just graduated from college and landed your first big job. You have always dreamed of being a homeowner, and after carefully shopping for your dream home, you find one that you would like to purchase at a cost of $250,000. After researching banks to find the best interest rate, you find that Banks for Homeowners offers the best rate of 6% interest that compounds monthly for 30 years.

•What is the monthly payment for this loan?
•What is the unpaid balance of the loan at the end of 5 years?
•What is the unpaid balance at the end of the 10th year?

  • math - ,

    y/2-5=1

  • math - ,

    Pt = (Po*r*t) / (1 - (1 + r)^-t).

    Pt = Loan amount after 30 years.

    Po = Amount of loan = $250,000.

    r = (6% / 12) / 100 = 0.005 = Int. rate
    per month expressed as a decimal.

    t=lenth of loan = 30 yrs. = 360 months.

    Pt=(250000*0.005*360)/(1 -(1.005)^-360,
    Pt = 450000 / (1-0.16604) = $539,595.47
    = Amount of loan after 30 yrs.

    539595.47 / 360mo = $1498.88 = monthly
    payments.

    The process of calculating the balance
    before the maturity date is called Amortizing and cannot be shown here
    because of the length of the table involved.

    I can share this INFO with you:

    5-Yr. Bal: $232,691.84

  • math - ,

    Payed off 56% of a 30 year mortgage in 5years....

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