Final answer:
1) For a fully amortizing loan, the monthly payment is approximately $665.30. 2) For a partially amortizing loan, the monthly payment is $583.33. 3) For a zero amortization loan, the monthly payment is approximately $583.33. 4) For a negative amortization loan, let's assume a monthly payment of $500, resulting in the loan balance increasing.
Step-by-step explanation:
1) If the mortgage is a Fully Amortizing (FA)
Using the formula for monthly payment on a fully amortizing loan:
Monthly Payment = (Loan Amount * Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate)^(-Number of Payments))
Applying the formula, we get:
Monthly Payment = (100,000 * 0.07/12) / (1 - (1 + 0.07/12)^-(30*12))
Monthly Payment ≈ $665.30
2) If the mortgage is a Partially Amortizing (PA)
For a partially amortizing loan, the monthly payment only covers the interest, while the principal remains partially unpaid. So, the monthly payment in this case will be the interest amount which is $583.33.
3) If the mortgage is a Zero Amortizing (IO)
For a zero amortization loan, the monthly payment only covers the interest. In this case, the monthly payment is calculated using the formula:
Monthly Payment = (Loan Amount * Monthly Interest Rate)
Applying the formula, we get:
Monthly Payment = (100,000 * 0.07/12)
Monthly Payment ≈ $583.33
4) If the mortgage is a Negative Amortizing (NA)
For a negative amortization loan, the monthly payment is less than the interest amount, resulting in the unpaid interest being added to the principal. Let's assume a monthly payment of $500. In this case, the loan balance will increase instead of decreasing.