math

The Taylors have purchased a $290,000 house. They made an initial down payment of $10,000 and secured a mortgage with interest charged at the rate of 10%/year on the unpaid balance. Interest computations are made at the end of each month. If the loan is to be amortized over 30 years, what monthly payment will the Taylor's be required to make?

How do I find out what is their equity (disregarding appreciation) after 5 years? After 10 years? After 20 years?

  1. 👍
  2. 👎
  3. 👁
  1. amount to be mortgaged = .9(290000)
    = 261,000
    i = .10/12 = .008333... (keep as is in calculator memory)
    n = 30(12) = 360
    payment = p

    p( 1 - 1.008333..^-360)/.008333 = 261000
    I get p = $2290.46

    I will do the "outstanding balance" after 5 years, you do the other two cases in the same way.

    Amount of debt if no payments had been made
    = 261000(1.0083333...)^60
    = 429,425.62
    value of 60 payments
    = 2290.46(1.008333..^60 - 1)/.008333..
    = 177366.65
    outstanding debt = 429,425.62 - 177366.65
    = 252,058.98

    Check with your notes , text, or instructions
    how you are to calculate "equity".
    I am not in the US, so am not familiar with your methods.

    1. 👍
    2. 👎

Respond to this Question

First Name

Your Response

Similar Questions

  1. Accounting

    Dristell Inc. had the following activities during the year (all transactions are for cash unless stated otherwise): A building with a book value of $400,000 was sold for $500,000. Additional common stock was issued for $160,000.

  2. Math

    A house worth $350,000 when purchased was worth $335.000 after the first year and $320,000 after the second year. If the economy does not pick up and this trend continues, what will be the value of the house after 6 years. A)

  3. Math

    Oaktree Company purchased a new machine and made the following expenditures: Purchase price $45,000 Sales tax 2,200 Freight charges for shipment of machine 700 Insurance on the machine for the first year 900 Installation of

  4. algebra

    A house has increased in value by 38% since it was purchased. If the current value is $483,000 , what was the value when it was purchased?

  1. Finance Math

    Daniel and Jan agreed to pay $560,000 for a four-bedroom colonial home in Waltham, Mass., with $60,000 down payment. They have a 30-year mortgage at a fixed rate of 6.00%. (a) How much is their monthly payment? (b) After the first

  2. Business Math

    Alicia borrowed $8,500 at 6% ordinary interest for 180 days. After 40 days, she made a partial payment of $2,000. After another 70 days, Alicia made a second partial payment of $2,000. What is the final amount due on the loan?

  3. Math

    A house is being purchased for $138,000.00. The 30-year mortgage has a 10% down payment, an interest rate of 4.875%, and a PMI payment of $25.88 each month for 77 months. The yearly taxes are $2400.00, and the insurance is $750.00

  4. math

    A house was purchased for $140,000. Three years later, the value of the house was $155,000. If the value V of the house increased linearly from the date it was purchased, which of the following represents the value, in dollars, of

  1. Finance

    Say that you purchase a house for $150,000 by getting a mortgage for $135,000 and paying a $15,000 down payment. Assume you get a 15-year mortgage with a 6 percent interest rate. If the house appreciates at a 2 percent rate per

  2. finite math

    The Taylors have purchased a $170,000 house. They made an initial down payment of $30,000 and secured a mortgage with interest charged at the rate of 9%/year on the unpaid balance. Interest computations are made at the end of each

  3. Math

    Euromart Tile Company borrowed $40,000 on April 6 for 66 days. The rate was 14% using the ordinary interest rate method. On day 25 of the loan, Euromart made a partial payment of $15,000, and on day 45 of the loan, Euromart made a

  4. Personal Finance

    Jody Asbell and three of her friends purchased a small shopping center in their town. They paid $985,090 and made a down payment of $125,000. They rented five of the stores for $3,400 each per month. Their annual expenses were

You can view more similar questions or ask a new question.