Increasing the down payment on a mortgage reduces both the size of the monthly payments and the total interest paid. Calculate the reduction in the monthly payment by increasing the down payment by the amount specified, and the amount saved on interest over the life of the loan. Assume the mortgage is for 20 years and use the table to find the monthly payments. Monthly payments on a $1,000 loan. Number of Years for the Loan Annual Interest Rate 3 10 20 30 4% $29.53 $22.58 $10.12 $6.06 $4.77 5% 29.97 23.03 10.61 6% 30.42 23.49 6.60 5.37 11.10 7.16 6.00 8% 31.34 24.41 12.13 8.36 7.34 10% 32.27 25.36 13.22 9.65 8.78 12% 33.21 26.33 14.35 11.01 10.29 Amount Interest Down Increase in of Loan $243,000 Rate Payment Down Payment 5% $52,000 $23,000 $123.51, $29,642.40 $164.68, $39,523.20 $151.80, $36,432.00 $139.38, $33,451.20
Increasing the down payment on a mortgage reduces both the size of the monthly payments and the total interest paid. Calculate the reduction in the monthly payment by increasing the down payment by the amount specified, and the amount saved on interest over the life of the loan. Assume the mortgage is for 20 years and use the table to find the monthly payments. Monthly payments on a $1,000 loan. Number of Years for the Loan Annual Interest Rate 3 10 20 30 4% $29.53 $22.58 $10.12 $6.06 $4.77 5% 29.97 23.03 10.61 6% 30.42 23.49 6.60 5.37 11.10 7.16 6.00 8% 31.34 24.41 12.13 8.36 7.34 10% 32.27 25.36 13.22 9.65 8.78 12% 33.21 26.33 14.35 11.01 10.29 Amount Interest Down Increase in of Loan $243,000 Rate Payment Down Payment 5% $52,000 $23,000 $123.51, $29,642.40 $164.68, $39,523.20 $151.80, $36,432.00 $139.38, $33,451.20
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Increasing the down payment on a mortgage reduces both the size of the monthly payments
and the total interest paid. Calculate the reduction in the monthly payment by increasing the
down payment by the amount specified, and the amount saved on interest over the life of
the loan. Assume the mortgage is for 20 years and use the table to find the monthly
payments.
Monthly payments on a $1,000 loan.
Number of Years for the Loan
Annual
Interest Rate
3
10
20
30
4%
$29.53 $22.58 $10.12 $6.06 $4.77
5%
29.97
23.03
10.61
6%
30.42
23.49
6.60 5.37
11.10 7.16 6.00
8%
31.34
24.41
12.13
8.36 7.34
10%
32.27
25.36
13.22 9.65 8.78
12%
33.21
26.33
14.35 11.01 10.29
Amount
Interest
Down
Increase in
of Loan
$243,000
Rate
Payment
Down Payment
5%
$52,000
$23,000
$123.51, $29,642.40
$164.68, $39,523.20
$151.80, $36,432.00
$139.38, $33,451.20
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