Interest and amortization
Once you enter adulthood, you will be faced with many responsibilities. You will have to understand new concepts that have a direct effect on your life. Understanding finances can save you a lot of money and help you make wise decisions. Buying your first house or apartment might happen sooner than you think. It’s worth getting ready to understand how to calculate interest and amortization.
Let’s learn the theory:
Exerecises:
- Chris Columbus bought a house for $293,000. He put 20% down and obtained a simple interest amortized loan for the balance at % 8 3 5 annually interest for 30 years.
- Find the amount of Chris’s monthly payment.
- Find the total interest paid by Chris.
- Most lenders will approve a home loan only if the total of all the borrower’s monthly payments, including the home loan payment, is no more than 38% of the borrower’s monthly income. How much must Chris make in order to qualify for the loan?
- Complete an amortization table for the first 2 months of the loan, the 180th through 181th months (only find the balance due for the 180th month) of the loan, and the final 2 months (only find the balance due for the 359th month) of the loan.
https://www.asu.edu/courses/mat142ej/finance/examples/Amortized_Loan_Example.pdf
Find the answers and more examples here.
