Videos: Mortgages and Amortization, part 1
Intro to Mortgages
You have just purchased a new house and taken a mortgage for $100,000. The interest rate is 12% compounded monthly and you will make payments for 25 years.
- Find the size of the monthly payment.
- The bank has a policy of rounding the payments up to the next cent. Find the new monthly payment and compute a new n.
- What was the balance of the loan after three periods?
- How much of your third payment was Principal? Interest?
- How much did you pay in the first year?
- How much of that was principal?
- How much of that was interest?
- What was the balance of the loan at the end of the first year?
- How much interest did you pay in the third year?
- Assuming the mortgage stays at the same rate until maturity, find the size of your last payment.
- Fill out the Amortization Table for the first year
More Vocabulary
