Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. in purchasing a house that is worth $175,000, you

In purchasing a house that is worth $175,000, you need to obtain a mortgage. Suppose you...

Free

80.2K

Verified Solution

Question

Finance

In purchasing a house that is worth $175,000, you need to obtaina mortgage. Suppose you choose a 30year fixed rate mortgage with aninterest rate/year of 9.74%. What is the annual payment required?How much of each year's payment goes to paying interest and howmuch to reducing the principal balance for the first 15 years?

Answer & Explanation Solved by verified expert
3.8 Ratings (537 Votes)

Annual rate(M)= yearly rate/1= 9.74% Annual payment= 18162.44
Year Beginning balance (A) Annual payment Interest = M*A Principal paid Ending balance
1 175000.00 18162.44 17045.00 1117.44 173882.56
2 173882.56 18162.44 16936.16 1226.28 172656.27
3 172656.27 18162.44 16816.72 1345.72 171310.55
4 171310.55 18162.44 16685.65 1476.80 169833.76
5 169833.76 18162.44 16541.81 1620.64 168213.12
6 168213.12 18162.44 16383.96 1778.49 166434.63
7 166434.63 18162.44 16210.73 1951.71 164482.92
8 164482.92 18162.44 16020.64 2141.81 162341.12
9 162341.12 18162.44 15812.02 2350.42 159990.70
10 159990.70 18162.44 15583.09 2579.35 157411.35
11 157411.35 18162.44 15331.87 2830.58 154580.77
12 154580.77 18162.44 15056.17 3106.28 151474.49
13 151474.49 18162.44 14753.62 3408.83 148065.67
14 148065.67 18162.44 14421.60 3740.85 144324.82
15 144324.82 18162.44 14057.24 4105.21 140219.61
16 140219.61 18162.44 13657.39 4505.05 135714.56
17 135714.56 18162.44 13218.60 4943.85 130770.71
18 130770.71 18162.44 12737.07 5425.38 125345.34
19 125345.34 18162.44 12208.64 5953.81 119391.53
20 119391.53 18162.44 11628.73 6533.71 112857.82
21 112857.82 18162.44 10992.35 7170.09 105687.73
22 105687.73 18162.44 10293.98 7868.46 97819.27
23 97819.27 18162.44 9527.60 8634.85 89184.42
24 89184.42 18162.44 8686.56 9475.88 79708.54
25 79708.54 18162.44 7763.61 10398.83 69309.71
26 69309.71 18162.44 6750.77 11411.68 57898.03
27 57898.03 18162.44 5639.27 12523.18 45374.86
28 45374.86 18162.44 4419.51 13742.93 31631.93
29 31631.93 18162.44 3080.95 15081.49 16550.43
30 16550.43 18162.44 1612.01 16550.43 0.00
Where
Interest paid = Beginning balance * Annual interest rate
Principal = Annual payment – interest paid
Ending balance = beginning balance – principal paid
Beginning balance = previous Year ending balance

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

In purchasing a house that is worth $175,000, you need to obtaina mortgage. Suppose you choose a 30year fixed rate mortgage with aninterest rate/year of 9.74%. What is the annual payment required?How much of each year's payment goes to paying interest and howmuch to reducing the principal balance for the first 15 years?

Other questions asked by students

Q

If the variation in the residuals is less than the variation in the response variable...

Statistics
Q

The pKapKa of hypochlorous acid is 7.530. A 60.0 mL solution of 0.130 M sodium hypochlorite...

Chemistry
Q

What volumes of 0.53 M HNO2 and 0.53 M NaNO2 must be mixed to prepare 1.00...

Chemistry
Q

5 A relative maximum occurs at 1 3 8

Calculus
Q

Use the following information for the Exercises below [The following information applies to the questions...

Accounting
Q

Parent plc acquired 80% of the ordinary share capital of Subsidiary plc on 1 January...

Accounting
Q

PART A Dantonio Corporation issued six-year, 3.5% bonds with a face value of $1,300,000 on...

Accounting
Q

Macee Department Store has three departments, and it conducts advertising campaigns that benefit all departments....

Accounting
Q

What purpose does the multiple bond types serve? Why are some at a premium or...

Accounting
Q

Cross Distribution Company uses two different independent variables number of orders and average weight of...

Accounting
Q

On November 7, Year 1, Gonzalez Company purchased equipment costing $29,500. The equipment has an...

Accounting
Q

On December 31, Year 5, Darrell Inc. purchased 100% of the outstanding shares of Kindersley...

Accounting