Posted by Anonymous on Monday, May 2, 2011 at 1:03pm.
The $15,000 can be added at the end to the total purchase price, but does not affect the mortgage calculations.
The formula for the mortgage calculations is:
P(1+i)^n = R((1+i)^n-1)/i
where
i=interest rate per period (month)
n=number of periods (months)
R=monthly payment
P=amount to borrow
(a) at 6.9% p.a.,
i=0.069/12=0.00575
n=12*25 years = 300 months
R=$1700 = monthly payment
Solve for P
P=R((1.00575)^300-1)/(0.00575*(1.00575^300))
=$242714.03
Add the down-payment of $15000 to get
$257,714.03 for the total purchase price.
I'll leave (b) for your exercise.
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