I. A family buys a house worth $326,000. They pay $75,000 deposit and take a mortgage for the balance at J12=9% p.a. to be amortized over 30 years with monthly payments.
a. Find the value of the mortgage on their house? (1 mark):
b. Find the value of the monthly payment? (3 marks
Answers
Given : A family buys a house worth $326,000. They pay $75,000 deposit and take a mortgage for the balance at 9% p.a. to be amortized over 30 years with monthly payments.
To find : value of the mortgage on their house , value of the monthly payment
Solution:
House worth = $326,000
Paid amount = $ 75000
Remaining amount = 326,000 - 75000 = $251,000
value of the mortgage on their house = $251,000
EMI Formula = [P x (R/100) x (1+(R/100)ⁿ]/[(1+(R/100)ⁿ-1]
P = 251000
R = 9 % per annum = 9/12 % per month = 0.75 % per month
n = 30 years = 360 months
EMI = Equated Monthly Payments
EMI = 251000 (0.75/100) * (1.0075)³⁶⁰ / ( (1.0075)³⁶⁰ -1)
=> EMI = 2019.6
value of the monthly payment = 2019.6$
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Value of mortgage = $251,000
EMI = $2019.60
Step-by-step explanation:
Given: A family buys a house worth $326,000. They pay $75,000 deposit and take a mortgage for the balance at 9% p.a. to be amortized over 30 years with monthly payments.
Find: Value of the mortgage and value of the monthly payment (EMI).
Solution:
Value of house = $326,000
Deposit = $75000
Value of mortgage = 326,000 - 75000 = $251,000
Now, P = 251000
R = 9 % per annum = 9/12 = 0.75% per month
n = 30 years = 360 months
EMI = [P x (R/100) x (1+(R/100)ⁿ]/[(1+(R/100)ⁿ-1]
= 251000 (0.75/100) * (1.0075)³⁶⁰ / ( (1.0075)³⁶⁰ -1)
EMI = $2019.60