Here is the problem you need to solve:
- On a $250,000 mortgage amortized over 30 years (360 months) at an interest rate of 11%, what would be the monthly payment?
- On a $125,000 mortgage with monthly payments of $1,049.00 at an interest rate of 9%, what is the length of time this mortgage is amortized over?
- On a $100,000 mortgage amortized over 20 years (240 months) with monthly payments of $1,118.56, what would the interest rate be?
- If a mortgage is amortized over 30 years (360 months) at an interest rate of 10% and monthly payments of $2,632.71, what is the original value of the mortgage?
- If a mortgage is amortized over 30 years (360 payments) at a 9.5% interest rate for $150,000 and there is a balloon due in 15 years (180 payments), what would be the monthly payment amount and the balloon amount? (This is a two-part question.)
Here is the solution:
2. On a $125,000 mortgage with monthly payments of $1,049.00 at an interest rate of 9%, what is the length of time this mortgage is amortized over?
The question is asking us what length of time this mortgage is amortized over, therefore, we can conclude that we are solving for N in this example. The interest rate is 9%, so we would enter that into I. It’s a $125,000 mortgage, so we would enter that amount into PV. The monthly payment amount is $1,049.00, so we would enter that into PMT. There is no talk of a balloon payment in this example, so we would enter 0 into FV. The answer, as listed above, should be 300.
Here is the answers are listed in bold.
Example # |
N |
I |
PV |
PMT |
FV |
1. |
360 |
11% |
$250,000 |
$-2,380.81 |
0 |
2. |
300 (Ans) |
9% |
$125,000 |
$-1,049.00 |
0 |