A 3/1 ARM is made for $150,000 at 7% with a 30 year maturity. Assuming that fixed payments are to be made monthly for three year
1 answer:
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Answer:
loan can you afford = $143097.67
total money will you pay the loan company = $378000
interest amount = $234902.33
Explanation:
given data
principal = $1050 per month
time = 30 year = 30 × 12 = 360 months
interest rate = 8% = = 0.006667 monthly
solution
we get here first maximum amount of loan by present value of annuity as
present value of annuity = principal × .........1
put here value we get
present value of annuity = 1050 ×
present value of annuity = $143097.67
and
now we get total amount of money pay will be as
total amount of money pay = principal × time period
total amount of money pay = $1050 × 360
total amount of money pay = $378000
and
total amount of interest paid will be
interest amount = total amount paid - loan amount
interest amount = $378000 - $143097.67
interest amount = $234902.33