Question

Mortgage Details

Principal
Loan Length
Interest Rate
Monthly Payment
A. $500.00
How much of the first
$150,000
payment for the
30 years mortgage described in
the table will go
towards principal?
4%
$716
C. $343.68
B. $372.32
D. $216.00

Answer 1

Explanation:

New houses in a neighborhood are selling for $175,000. A down payment of $18,000 is

required and a 25-year mortgage at an annual interest rate of 8% is available. Find the

monthly mortgage payment.

Selling price = 175000

down payment = 18000

interest rate = 8% = 0.08

time = 25 years = 300 months (25 * 12)

First, we will compute the total interest for the loan

I = P * R * T

I = (175000 - 18000)(0.08)(25)

I = (157000)(0.08)(25)

I = 314000