Final answer:
You should use an amortization table to calculate annual payments for a house loan, which accounts for the loan amount, interest rate, and number of payment periods. An online calculator can help you assess the differences between 15-year and 30-year mortgages, and present value calculations can compare future and current money values based on the interest rate.
Step-by-step explanation:
When you are borrowing money to buy a house and want to calculate your annual payment, the time value of money table you should use is the amortization table. This table will help you determine the periodic payment amount for a loan, taking into account the loan amount, interest rate, and the number of periods. To get a complete understanding of the costs involved in different mortgage terms, you can use this online calculator tool to decide between a 15-year and a 30-year mortgage. It is also useful to understand the concept of present value calculations, which help you to compare the value of money now with the value of money in the future given a specific interest rate.
For example, if you have a $300,000 loan at a 6% interest rate convertible monthly over 30 years, you will need to calculate the monthly payments. By doing so, and by considering making extra payments equivalent to one twelfth of a monthly payment annually, you can find out how much time and money you could save over the life of the loan. Moreover, understanding the impact of opportunity cost and interest rate risks, similar to those encountered when buying bonds, can help you comprehend the financial implications of your mortgage decisions over time.