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#1) On June 1, you borrowed $195,000 to buy a house. The mortgage rate is 5.20...

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Finance

#1) On June 1, you borrowed $195,000 to buy a house. Themortgage rate is 5.20 percent. The loan is to be repaid in equalmonthly payments over 15 years. How much of the first paymentapplies to the principal balance? $714.43 $722.50 $717.51 $756.70$658.56

#13) You want to borrow $34,800 and can afford monthly paymentsof $960 for 48 months, but no more. Assume monthly compounding.What is the highest APR rate you can afford?

13.18 percent

14.52 percent

9.24 percent

13.67 percent

14.82 percent

Answer & Explanation Solved by verified expert
3.6 Ratings (640 Votes)

1) $717.51
Working:
Monthly repayment = =pmt(rate,nper,-pv)
= $   1,562.44
Where,
rate 5.20%/12 = 0.0043333
nper 15*12 = 180
pv = $ 1,95,000
Interest expense = Loan amount * Monthly interest rate
= $   1,95,000 * 0.0043333
= $       845.00
First month payment applied to principal balance = Monthly repayment - Interest expense
= $ 1,562.44 - $ 845.00
= $     717.44
Difference of $ 0.07 is due to rounding off difference.
2) 14.52%
Working:
APR = =rate(nper,pmt,-pv)*12
= 14.52%
Where,
nper 48
pmt $             960
pv $       34,800

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Transcribed Image Text

#1) On June 1, you borrowed $195,000 to buy a house. Themortgage rate is 5.20 percent. The loan is to be repaid in equalmonthly payments over 15 years. How much of the first paymentapplies to the principal balance? $714.43 $722.50 $717.51 $756.70$658.56#13) You want to borrow $34,800 and can afford monthly paymentsof $960 for 48 months, but no more. Assume monthly compounding.What is the highest APR rate you can afford?13.18 percent14.52 percent9.24 percent13.67 percent14.82 percent

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