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A young couple buying their first home borrow $65,000 for 30 years at 7.4%, compounded monthly,...

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Basic Math

A young couple buying their first home borrow $65,000 for 30years at 7.4%, compounded monthly, and make payments of $450.05.After 5 years, they are able to make a one-time payment of $2000along with their 60th payment.

(a) Find the unpaid balance immediately after they pay the extra$2000 and their 60th payment. (Round your answer to the nearestcent.)
$  

(b) How many regular payments of $450.05 will amortize the unpaidbalance from part (a)? (Round your answer to the nearest wholenumber.)
payments

(c) How much will the couple save over the life of the loan bypaying the extra $2000? (Use your answer from part (b). Round youranswer to the nearest cent.)
$

Answer & Explanation Solved by verified expert
3.7 Ratings (517 Votes)
aThe formula used to calculate the fixed monthly payment P required to fully amortize a loan of L dollars over a term of n months at a monthly interest rate of r is P Lr1 rn1 rn 1    See Answer
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