Posted by **Tonia** on Monday, August 8, 2011 at 11:05pm.

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 -
**drwls**, Tuesday, August 9, 2011 at 6:45am
There is a formula for this but I can't remember it. It is easier to use an amortization table such as the one at

http://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx?ec_id=m1027743

Using it, I got a monthly payment of $1498.88

After 5 years, the unpaid balance is $232,300.20

After 10 years, the unpaid balance is $209,214.31

- math -
**drwls**, Tuesday, August 9, 2011 at 6:47am
The formula to use can be found at http://www.amortizationformula.org/

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