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Alice is concerned about the financing of a home. She saw a home selling for $120,000....

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Finance

Alice is concerned about the financing of a home. She saw a homeselling for $120,000. If she puts 10% down, what will hermonthly payment be for a 30 year loan at thefollowing percentages? What is the total cost of interestover the life of the loan for each assumption A, B, C, andD?

A. 8%       B.9%       C.10%           D.11%

Answer & Explanation Solved by verified expert
3.9 Ratings (766 Votes)
Answer A Calculation of monthly payment on loan and total interest over the life of loan when Interest rate is 8 We can use the present value of annuity formula to calculate monthly loan payment Present Value of annuity P x 11rnr Present Value of annuity Loan amount Cost of house x 90 120000 x 90 108000 P monthly loan payment r interest rate per month 00067 n number of monthly payments 360 108000 P x 110006736000067 108000 P x 1362835 P 79247 Monthly Loan payment 79247 Total Interest over the life of loan Monthly Payment x    See Answer
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Transcribed Image Text

Alice is concerned about the financing of a home. She saw a homeselling for $120,000. If she puts 10% down, what will hermonthly payment be for a 30 year loan at thefollowing percentages? What is the total cost of interestover the life of the loan for each assumption A, B, C, andD?A. 8%       B.9%       C.10%           D.11%

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