Question

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?

b. Find the value of the monthly payment?

c. Find the loan outstanding after making 20 payments?

d. Find the principal repaid in the 21st payment?

Answer 1

Answer:

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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.  

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$

loan outstanding after 20 payments =  $ 248053.5

Principle repaid in 21st payment = $159.2