A family has an $80,000, 20-year loan at 8% compounded monthly. (a) Find the monthly payment and the total interest paid. (b) Suppose the family decides to add an extra $100 to its mortgage payment each month starting with the very first payment. How long will it take the family to pay off the mortgage? (c) Referring to part (i) and (ii), how much interest will the family save?
A family has an $80,000, 20-year loan at 8% compounded monthly. (a) Find the monthly payment and the total interest paid. (b) Suppose the family decides to add an extra $100 to its mortgage payment each month starting with the very first payment. How long will it take the family to pay off the mortgage? (c) Referring to part (i) and (ii), how much interest will the family save?
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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A family has an $80,000, 20-year loan at 8% compounded monthly.
(a) Find the monthly payment and the total interest paid.
(b) Suppose the family decides to add an extra $100 to its mortgage payment each month starting with the very first payment. How long will it take the family to pay off the mortgage?
(c) Referring to part (i) and (ii), how much interest will the family save?
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