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?
2.--Sarah finances $549,000 with a 30/6 balloon mortgage at 5.35%. How much will she pay for principal and interest over the life of the loan?
3.--Julianne and Benjamin are financing $113,500 to purchase a house. They obtain a 15/5 balloon mortgage at 4.95%. What will their balloon payment be?
4.--Mario obtains a 30/7 balloon mortgage to finance $245,500 at 5.25%. How much principal and interest will he have already paid when his balloon payment is due?
5.-- Maya obtains a $423,000 30/10 balloon mortgage with a rate of 5.65%. What will her monthly payments be?
Sarah finances $549,000 with a 30/6 balloon mortgage at 5.35%. How much will she pay for principal and interest over the life of the loan? (3 points)
To calculate the answers for the given questions, we need to use the formula for calculating mortgage payments:
M = P * (((r * (1 + r)^n) / ((1 + r)^n - 1)))
Where:
M = Monthly Payment
P = Loan Amount
r = Monthly Interest Rate
n = Total Number of Payments
We will use this formula to calculate the required values step by step for each question. Let's begin:
1. Cody and Carolyn:
Loan Amount (P): $216,000
Monthly Interest Rate (r): 4.55% / 100 = 0.0455
Total Number of Payments (n): 20 years * 12 months/year = 240 payments
Calculate Monthly Payment (M):
M = $216,000 * (((0.0455 * (1 + 0.0455)^240) / ((1 + 0.0455)^240 - 1)))
Calculate Total Interest Paid:
Total Interest Paid = (M * n) - P
2. Sarah:
Loan Amount (P): $549,000
Monthly Interest Rate (r): 5.35% / 100 = 0.0535
Total Number of Payments (n): 30 years * 12 months/year = 360 payments
Calculate Monthly Payment (M):
M = $549,000 * (((0.0535 * (1 + 0.0535)^360) / ((1 + 0.0535)^360 - 1)))
Calculate Total Principal and Interest Paid:
Total Principal and Interest Paid = M * n
3. Julianne and Benjamin:
Loan Amount (P): $113,500
Monthly Interest Rate (r): 4.95% / 100 = 0.0495
Total Number of Payments (n): 15 years * 12 months/year = 180 payments
Calculate Monthly Payment (M):
M = $113,500 * (((0.0495 * (1 + 0.0495)^180) / ((1 + 0.0495)^180 - 1)))
Calculate Balloon Payment:
Balloon Payment = P * (1 + r)^n
4. Mario:
Loan Amount (P): $245,500
Monthly Interest Rate (r): 5.25% / 100 = 0.0525
Total Number of Payments (n): 30 years * 12 months/year = 360 payments
Balloon Payment (B): P / (1 + r)^n
Calculate Monthly Payment (M):
M = $245,500 * (((0.0525 * (1 + 0.0525)^360) / ((1 + 0.0525)^360 - 1)))
Calculate Total Principal and Interest Paid:
Total Principal and Interest Paid = (M * n) - B
5. Maya:
Loan Amount (P): $423,000
Monthly Interest Rate (r): 5.65% / 100 = 0.0565
Total Number of Payments (n): 30 years * 12 months/year = 360 payments
Calculate Monthly Payment (M):
M = $423,000 * (((0.0565 * (1 + 0.0565)^360) / ((1 + 0.0565)^360 - 1)))
Now, let's calculate the values step by step for each question.
To answer these questions, we need to understand what a balloon mortgage is and how it works.
A balloon mortgage is a type of mortgage that offers lower monthly payments initially, but requires a large lump sum payment at the end, known as the "balloon payment." The balloon payment is typically larger than the regular monthly payments and is usually required after a specific time period, such as 5, 7, or 10 years.
To calculate the answers to these questions, we need to know the loan amount, the term of the loan, the interest rate, and the balloon payment term. With this information, we can calculate the monthly payments using a formula and then determine the total interest and principal payments over the life of the loan.
Let's go through each question step by step:
1. Cody and Carolyn have a 20/7 balloon mortgage for $216,000 with a rate of 4.55%. To calculate the interest paid over the life of the loan, we need to know the loan term, which in this case is 20 years. The balloon payment term is 7 years. We will use these values to calculate the monthly payments and then subtract the principal loan amount to find the total interest paid.
2. Sarah finances $549,000 with a 30/6 balloon mortgage at 5.35%. Similarly, we need to know the loan term (30 years) and the balloon payment term (6 years) to calculate the principal and interest paid over the life of the loan.
3. Julianne and Benjamin are financing $113,500 to purchase a house. They obtain a 15/5 balloon mortgage at 4.95%. The loan term is 15 years, and the balloon payment term is 5 years. We need to calculate the balloon payment amount.
4. Mario obtains a 30/7 balloon mortgage to finance $245,500 at 5.25%. The loan term is 30 years, and the balloon payment term is 7 years. We need to calculate the principal and interest paid when the balloon payment is due.
5. Maya obtains a $423,000 30/10 balloon mortgage with a rate of 5.65%. We need to calculate the monthly payments based on the loan term of 30 years and balloon payment term of 10 years.
To solve each question, the specific formulas and calculations will be used based on the information provided in each scenario.
1)61,443.88
2)510,674.71
3)84,887.22
4)11,3875.44
5)2,441.71