Bus Finance
posted by Allison .
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.

I think you are talking about this post, which I found again
http://www.jiskha.com/display.cgi?id=1328305692
I have no idea why you are taking
893.60(12)(.035) to get 375.31
That would a "simple interest" calculation.
BUT, the composition of interest and repayment of the constant 893.60 is changing from month to month
e.g.
interest in 1st month = 125000(.035)/12 = 364.58
repayment = 893.60  364.58 = 529.02
balance at end of 1st month = 125000  529.02 = 124470.98
interest in 2nd month = 124470(.035)/12 = 363.04
repayment = 893.60  363.40 = 530.56
balance at end of 2nd month = 124470.98  530.56 = 23940.42
etc.
think of it this way:::
Had he paid cash...
cost = 165000
what did he actually pay?
paid: 40000 + 893.60(180) = 200848.00
so the difference = 200848  165000 = 35848
If you only want to consider the actual loan of 125000, then the actual outlay would be
893.60(180) or $160848
and the difference between 160848 and 125000 is 35848
in other words, the 40000 would not enter the picture
In actuarial math we would never ask the question "What is the total interest ?"
since the amounts of interest are accrued at different times so we can't just add them up (which is what we just did)
e.g.
Suppose Bill owes 4000 now and another 2000 three years from now.
It would be false to say that Bill owes $6000 , without taking into consideration the time interval and the rate of interest.
Respond to this Question
Similar Questions

finance mortgage payment
Purchase a home for $160,000. I intend to put down 20% and finance the remainder over 15 years at 6 3/8% interest. If my taxes & insurance totals $3,600 per year, how much will my total monthly payment be? 
Math
If you finance $50,000 of the purchase of your new home at 4.40% compounded monthly for 30 years, the monthly payment will be $250.38. If instead your had a rate of 4.80% compounded monthly for 15 years, the monthly payment will be … 
Bus Finance
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? 
finance
You take out a 30 yr mortgage loan, purchase price is $120,000 put $20,000 down and finances the balance of $100,000 at fixed annual loan rate of 12%, what will be your monthly payment? 
Finance
Suppose that you want to purchase a home for $450,000 with a 30 year mortgage at 6% interest. Suppose that you can put 40% down. Assume that the monthly cost to finance $1,000 is $6.00. What are the monthly payments 
managerical finance
You want to purchase a new condominium which costs $329,000. Your plan is to pay 20 percent down in cash and finance the balance over 25 years at 6.25 percent. What will be your monthly mortgage payment? 
Math
1.Cody and Carolyn have a 20/7 balloon mortgage for $216,000 with a rate of 4.55%. How much will they pay in interest over the life of the loan? 
Math  Personal Finance
Ina is negotiating a mortgage of $145 000 for her new house. Determine Ina's monthly payments for a mortgage at 5% annum, compounded semiannually, amortized over 25 years. How much will Ina pay over the 25 years to pay off this mortgage? 
Math: Personal Finance
Over the past 30 years, interest rates have varied widely. The rate for a 30year mortgage reached a high of 14.75% in July 1984, and it reached a low of 4.64% in October 2010. A significant impact of lower interest rates on society … 
Business Math
A couple purchased a home 5 years ago with a 20year mortgage for $50,000 at an interest rate of 6% compounded monthly. The home is now valued at $90,000. A) How much are the couple's monthly payments?