Question

Suppose you are buying your first condo for $250,000, and you will make a $30,000 down payment. You will finance the remainder with a 30-year, monthly payment, amortized mortgage at a 6% nominal interest rate, with the first payment due in one month. What will your monthly payments be

Answer 1

Answer:

The monthly payments will be

= $1,319.01.

Explanation:

a) Data and Calculations;

Cost of the first condo = $250,000

Down payment = $30,000

Principal loan amount = $220,000 ($250,000 - $30,000)

Period of monthly payments = 30 years or 360 months

Nominal interest rate = 6%

N (# of periods)  360

I/Y (Interest per year)  6

PV (Present Value)  220000

FV (Future Value)  0

Results

PMT = $1,319.01

Sum of all periodic payments $474,844.02

Total Interest $254,844.02