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A) Helena purchases a condo and obtains a $250,000 fully amortizing level payment 15 year...

Question:

A) Helena purchases a condo and obtains a $250,000 fully amortizing level payment 15 year mortgage bearing an (annual) interest rate of 6.75%.

How much will her monthly blended principal and interest payment be?

N Interest PV PMT FV

B) For months 1, 2 and 3 of the mortgage, determine how much of the total payment is principal and how much is interest and construct an amortization table.

Month Beginning principal payment interest amortization of principal ending principal
1
2
3

Mortgage loan

A mortgage loan is a type of loan which is commonly used in purchasing a real estate property. It is an asset-backed loan in which the purchased real estate is considered as collateral in terms of default of the loan.

Answer and Explanation:

Question A:

Formula on calculating the monthly payment:

{eq}PMT=\frac{LV}{\frac{1-(1+\frac{r}{m})^{-nm}}{\frac{r}{m}}}\\ whereas:\\ LV=loan~value\\...

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Buying a House: Mortgage Types & Loan Length

from Finance 102: Personal Finance

Chapter 7 / Lesson 4
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