Fixed-Rate Mortgage Payments EXAMPLE Mortgage Rate Term in Years $134,000 6.75% 25 Step 1 Look in the table. The payment at 6.75% for 25 years is $6.91. Step 2 $ 6.91 Payment for $1,000 X 134 (Loan is $134,000) $925.94 Payment for $134,000 Step 3 12 Months x 25 Years 300 Months in 25 years Step 4 S X 925.94 Payment for 1 month Months 300 $277,782.00 Total payment Term Total Mortgage Rate in years Payment 6% 7% 6% 7% 7% 7.25% 7% 7.75% 7% 1. $235,000 2. $235,000 3. $84,000 4. $84,000 5. $150,000 6. $150,000 7. $202,000 8. $202,000 9. $856,000 10. $856,000 7% 11. $208,000 6% 12. $208,000 13. $157,000 30 30 30 30 25 25 25 25 Monthly Payment to Amortize (Repay) a Loan of $1,000 Term Rate 5.50% 25 30 30 30 30 5.75% 6.00% 6.25% 6.50% 6.75% 7.00% 7.25% 7.50% 7.75% Directions Compute the total payment for each of these mortgage loans. 20 Yrs. 6.88 7.02 7.16 7.31 7.46 7.60 7.75 7.90 14. $146,000 15. $146,000 16. $136,000 17. $136,000 18. $365,000 19. $365,000 20. $185,000 21. $185,000 22. $1,140,000 23. $1,140,000 24. $142,000 6.75% 25. $142,000 5.50% 26. $155,000 American Guidance Service, Inc. Permission is granted to reproduce for classroom use only. 8.06 8.21 Chapter 4, Lesson 5 25 Yrs. 6.14 6.29 6.44 6.60 6.75 6.91 7.07 7.23 7.39 7.55 Mortgage Rate 6% 6% 7% 7% 6% 6% 6% 6% 6% 6% 5.5% 5.5% 6% 30 Yrs. 5.68 5.84 6.00 6,16 6.32 6.49 6.65 6.82 6.99 7.16 Total Term in years Payment 25 20 25 30 25 30 25 20 25 30 25 45 30 25 Consumer Mathematics

DISCOVR: Amortizing a Mortgage When they bought their house, John and Mary took out a $90,000 mortgage at 9% interest, repayable monthly over 30 years. Their payment is $724.17 per month (check this, using the formula in the text). The bank gave them an amortization schedule, which is a table showing how much of each payment is interest, how much goes toward the principal, and the remaining principal after each payment. The table below shows the first few entries in the amortization schedule. After 10 years they have made 120 payments and are wondering how much they still owe, but they have lost the amortization schedule. How much do John and Mary still owe on their mortgage? [Hint: The remaining balance is the present value of the 240 remaining payments.] How much of their next payment is interest, and how much goes towards the principal? [Hint: Since 912=o.75 , they must pay 0.75% of the remaining principal in interest each month.]