# Mortgage Project

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Question description

Loan Payment Formula for Installment Loans The regular payment amount, PMT, required to repay a loan of P dollars paid n times per year over t years at an annual rate r is given by ⎛r⎞ P⎜ ⎟ ⎝n⎠ PMT = −nt ⎛ r⎞ 1 − ⎜1 + ⎟ ⎝ n⎠ On a scientific calculator you will need to enter extra parentheses to ensure the calculations are done in the correct order. The denominator and the exponent need to be inside parentheses. ⎛r⎞ P⎜ ⎟ ⎝n⎠ PMT = ⎛ ⎛ r ⎞ ( − nt ) ⎞ ⎟ ⎜1 − ⎜1 + ⎟ ⎜ ⎝ n⎠ ⎟ ⎝ ⎠ The key sequence would be P × r ÷ n ÷ (1 − (1 + r ÷ n)^ (−n × t )) = Note: (1)To raise to a power you may need to use ^ or yx or xy. (2) You may need to enter n first and then press the (-) sign key. Example: Calculate the monthly payment for a loan of \$200,000 if the interest rate is 8% and the loan is for 20 years. P = 200,000; r = 0.08; n = 12; t = 20 200000 × .08 ÷ 12 ÷ (1 − (1 + .08 ÷ 12)^ (−12 × 20)) = 1672.880123798 ≈ \$1,672.88
Mortgage Project – Comparing Fixed Rate Home Mortgage Options Team Member Team Member Both team members need to upload the project report to receive credit. Property Address Purchase Price Website for property information Website for interest rate information Website for mortgage calculator 20% down payment Loan Amount 30-year interest rate Monthly Payment Total Interest paid 1st payment where Principal payment exceeds Interest payment Interest saved by paying \$100 extra toward principal each month (Use an online mortgage calculator to find this information.) 15-year interest rate Monthly Payment Total Interest paid 1st payment where Principal payment exceeds Interest payment Interest saved by paying \$100 extra toward principal each month (Use an online mortgage calculator to find this information.) 10% down payment Loan Amount 30-year interest rate Monthly Payment Total Interest paid 1st payment where Principal payment exceeds Interest payment Interest saved by paying \$100 extra toward principal each month (Use an online mortgage calculator to find this information.) 15-year interest rate Monthly Payment Total Interest paid 1st payment where Principal payment exceeds Interest payment Interest saved by paying \$100 extra toward principal each month (Use an online mortgage calculator to find this information.) Recommendation letter to client/friend included on separate page.

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