solve the morgage probelm

Question

Justin lowery is buying a condominium that sells for $130,000. the bank is requiring a minimum down payment of 15% to obtain a 20 years mortgage at 9.0% interest . determine Justin's down payment , monthly payment including principal and interest , and total interest he will pay over the 20 years

Down Payment =

Monthly Payment =

Total interest =

Answer 1

His down payment is .15 x $130,000 = $19,500

Loan Amount = $130,000-$19,500 = $110,500

Assuming that the calculations are made on a monthly basis

Monthly Payment = $986.80 if he makes payments at the beginning of the period (Case 1)

Monthly Payment = $994.20 if he makes payments at the end of the period (Case 2)

Total Interest = 240 x $986.80 - $110,500 = $236,832 - $110,500 = $126,332 (Case 1)

Total Interest = 240 x $994.20 - $110,500 = $238,608 - $110,500 = $128,108 (Case 2)