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October 22, 2014

Homework Help: Bus Finance

Posted by Allison on Monday, February 6, 2012 at 7:44am.

You want to purchase a home. cost $165,000. you have $40,000 downpayment. you want to finance rest at 3.5% for 15 years. how much will monthly mortgage be? How much in total will you pay over the 15 years even counting the downpayment? I came up with payment of $893.6 for first part. Again, I am not too sure if I am entering correctly into the calculator.

Bus Finance - Reiny, Friday, February 3, 2012 at 5:18pm

balance after downpayment = 125000
i = .035/12 = .002916666... (I stored in memory of calculator)
n = 180

125000 = paym (1 - 1.002916666..^-180)/.00291666
payment = 893.60 , you are correct.

take it from there, that was the hard part

Bus Finance - allison, Friday, February 3, 2012 at 7:35pm

to continue. it asks how much in total you will pay over the 15 years based on mortgage and down payment. I used the (893.60*12)(15)+40,000=200848.00. It then asks what portion of that is interest. I used the 200848.00FV 125000PV 180N with the I/YR=3.17%.

Bus Finance - Reiny, Friday, February 3, 2012 at 8:12pm

since we paid back a total of 200848 on the original loan of 165000, the difference, or 35848 must have been interest.

****this is where I am coming up with something not adding up. I would assume since we only borrowed the $125,000 that we would not be actually paying interest on the $40,000 we put down to bring the total down from $165,000. I took the monthly payments (893.6*12)*3.5%=375.31. I took (375.31*12)(15 years) and came up with $67555.80 for total interest.

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