question archive Explain the importance of the mortgage market, how it contributes to our personal lives
Explain the importance of the mortgage market, how it contributes to our personal lives
Subject:FinancePrice:2.86 Bought18
Explain the importance of the mortgage market, how it contributes to our personal lives. Verify your answer with a numerical example of mortgage product, e.g. calculate the monthly payment, total payment and total interest payment, given a specified mortgage rate, borrowing length etc. Show all the equations and processes required to obtain the monthly payment, interest payment and principal. Use a table to report the monthly payment, interest payment and principal during the borrowing length.
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ANSWER
| amount | 50000 | ||||
| interest | 12.00% | ||||
| periodicity | monthly | ||||
| time | 5 | ||||
| effective rate of interest | 0.01 |
= 12 / 12 |
|||
| total no. of payments | 60 | = 5 x 12 | |||
| installment | ? 1,101.21 | =pmt | |||
| no. of payments | principal | installments | interest | principal prepayment | closing balance |
| 1 | $50,000.00 | $1,101.21 | $500.00 | $601.21 | $49,398.79 |
| 2 | $49,398.79 | $1,101.21 | $493.88 | $607.33 | $48,791.46 |
| 3 | $48,791.46 | $1,101.21 | $487.69 | $613.52 | $48,177.94 |
| 4 | $48,177.94 | $1,101.21 | $481.45 | $619.76 | $47,558.18 |
| 5 | $47,558.18 | $1,101.21 | $475.14 | $626.07 | $46,932.11 |
| 6 | $46,932.11 | $1,101.21 | $468.77 | $632.44 | $46,299.67 |
| 7 | $46,299.67 | $1,101.21 | $462.34 | $638.87 | $45,660.80 |
| 8 | $45,660.80 | $1,101.21 | $455.84 | $645.37 | $45,015.42 |
| 9 | $45,015.42 | $1,101.21 | $449.27 | $651.94 | $44,363.49 |
| 10 | $44,363.49 | $1,101.21 | $442.64 | $658.57 | $43,704.92 |
| 11 | $43,704.92 | $1,101.21 | $435.95 | $665.26 | $43,039.66 |
| 12 | $43,039.66 | $1,101.21 | $429.19 | $672.03 | $42,367.63 |
| 13 | $42,367.63 | $1,101.21 | $422.35 | $678.86 | $41,688.78 |
| 14 | $41,688.78 | $1,101.21 | $415.46 | $685.75 | $41,003.02 |
| 15 | $41,003.02 | $1,101.21 | $408.49 | $692.72 | $40,310.30 |
| 16 | $40,310.30 | $1,101.21 | $401.45 | $699.76 | $39,610.54 |
| 17 | $39,610.54 | $1,101.21 | $394.34 | $706.87 | $38,903.68 |
| 18 | $38,903.68 | $1,101.21 | $387.16 | $714.05 | $38,189.63 |
| 19 | $38,189.63 | $1,101.21 | $379.91 | $721.30 | $37,468.33 |
| 20 | $37,468.33 | $1,101.21 | $372.59 | $728.62 | $36,739.71 |
| 21 | $36,739.71 | $1,101.21 | $365.19 | $736.02 | $36,003.70 |
| 22 | $36,003.70 | $1,101.21 | $357.72 | $743.49 | $35,260.21 |
| 23 | $35,260.21 | $1,101.21 | $350.18 | $751.03 | $34,509.18 |
| 24 | $34,509.18 | $1,101.21 | $342.56 | $758.65 | $33,750.53 |
| 25 | $33,750.53 | $1,101.21 | $334.86 | $766.35 | $32,984.18 |
| 26 | $32,984.18 | $1,101.21 | $327.09 | $774.12 | $32,210.06 |
| 27 | $32,210.06 | $1,101.21 | $319.24 | $781.97 | $31,428.09 |
| 28 | $31,428.09 | $1,101.21 | $311.31 | $789.90 | $30,638.19 |
| 29 | $30,638.19 | $1,101.21 | $303.30 | $797.91 | $29,840.27 |
| 30 | $29,840.27 | $1,101.21 | $295.21 | $806.00 | $29,034.27 |
| 31 | $29,034.27 | $1,101.21 | $287.04 | $814.17 | $28,220.10 |
| 32 | $28,220.10 | $1,101.21 | $278.79 | $822.42 | $27,397.68 |
| 33 | $27,397.68 | $1,101.21 | $270.45 | $830.76 | $26,566.92 |
| 34 | $26,566.92 | $1,101.21 | $262.04 | $839.18 | $25,727.75 |
| 35 | $25,727.75 | $1,101.21 | $253.53 | $847.68 | $24,880.07 |
| 36 | $24,880.07 | $1,101.21 | $244.95 | $856.26 | $24,023.81 |
| 37 | $24,023.81 | $1,101.21 | $236.27 | $864.94 | $23,158.87 |
| 38 | $23,158.87 | $1,101.21 | $227.51 | $873.70 | $22,285.17 |
| 39 | $22,285.17 | $1,101.21 | $218.67 | $882.54 | $21,402.63 |
| 40 | $21,402.63 | $1,101.21 | $209.73 | $891.48 | $20,511.15 |
| 41 | $20,511.15 | $1,101.21 | $200.71 | $900.50 | $19,610.65 |
| 42 | $19,610.65 | $1,101.21 | $191.59 | $909.62 | $18,701.03 |
| 43 | $18,701.03 | $1,101.21 | $182.39 | $918.83 | $17,782.20 |
| 44 | $17,782.20 | $1,101.21 | $173.09 | $928.12 | $16,854.08 |
| 45 | $16,854.08 | $1,101.21 | $163.70 | $937.51 | $15,916.57 |
| 46 | $15,916.57 | $1,101.21 | $154.21 | $947.00 | $14,969.57 |
| 47 | $14,969.57 | $1,101.21 | $144.63 | $956.58 | $14,012.99 |
| 48 | $14,012.99 | $1,101.21 | $134.95 | $966.26 | $13,046.73 |
| 49 | $13,046.73 | $1,101.21 | $125.18 | $976.03 | $12,070.70 |
| 50 | $12,070.70 | $1,101.21 | $115.31 | $985.90 | $11,084.80 |
| 51 | $11,084.80 | $1,101.21 | $105.34 | $995.87 | $10,088.93 |
| 52 | $10,088.93 | $1,101.21 | $95.27 | $1,005.94 | $9,083.00 |
| 53 | $9,083.00 | $1,101.21 | $85.10 | $1,016.11 | $8,066.89 |
| 54 | $8,066.89 | $1,101.21 | $74.83 | $1,026.38 | $7,040.51 |
| 55 | $7,040.51 | $1,101.21 | $64.46 | $1,036.75 | $6,003.76 |
| 56 | $6,003.76 | $1,101.21 | $53.98 | $1,047.23 | $4,956.53 |
| 57 | $4,956.53 | $1,101.21 | $43.40 | $1,057.81 | $3,898.72 |
| 58 | $3,898.72 | $1,101.21 | $32.71 | $1,068.50 | $2,830.22 |
| 59 | $2,830.22 | $1,101.21 | $21.92 | $1,079.30 | $1,750.92 |
| 60 | $1,750.92 | $1,101.21 | $11.01 | $1,090.20 | $660.73 |
