Question

1. Jack and Jill purchased a $125,000 house making a 20% down payment and paying the closing

Answer 1

Answer:

The month payment amount is $897.589

Interest amount is $61,566

Step-by-step explanation:

Given as :

The price of the house = $125,000

The down payment amount for house = 20% of total price

i.e The down payment amount for house = 20% × $125,000

Or, The down payment amount for house = $\dfrac{20}{100}$ × $125,000

Or, The down payment amount for house = $25,000

Now, Balance amount = total price - down payment

Or, Balance amount = $125,000 - $25,000

Or, Balance amount = $100,000

So, The balance amount is bring finance

The finance principal amount = p = $100,000

The rate of interest applied = r = 3.25%

The time period of mortgage = t = 15 years = 15 × 12 = 180 months

Let The Amount of mortgage after 15 years = $A

From Compound Interest method

Amount = Principal × $(1+\dfrac{\textrm rate}{100})^{\textrm time}$

Or, A = p × $(1+\dfrac{\textrm r}{100})^{\textrm t}$

Or, A = $100,000 × $(1+\dfrac{\textrm 3.25}{100})^{\textrm 15}$

Or, A = $100,000 × $(1.0325)^{15}$

Or, A = $100,000 × 1.61566

Or, A = $161,566

So,The Amount of mortgage after 15 years = $161,566

Interest applied = Amount - principal

Or, I = $161,566 - $100,000

∴ Interest = $61,566

Again

The month payment amount = $\dfrac{\textrm amount after 15 years}{number of months of mortgage}$

i.e The month payment amount = $\dfrac{161566}{180}$

Or, The month payment amount = $897.589

Hence The month payment amount is $897.589 and interest amount is $61,566  . Answer