Your dream is finally coming true! You've saved and saved and are about to become a homeowner!
After a conversation with your banker, you've agreed to a
2
0
%
down payment on your $
1
8
2
,
1
8
8
home. To keep this problem and your calculations
relatively brief, assume that the bank has offered you a mortgage loan for $
1
4
5
,
7
5
0
that carries a
6
%
interest rate, semiannual payments of $
2
6
,
9
0
5
,
and a
3
-
year term. Remember, the process is the same when you are preparing for either
6
semiannual payments of nearly $
2
7
,
0
0
0
or
3
6
0
monthly
payments of $
8
7
3
.
8
5
for a
3
0

-
year conventional mortgage.
Complete the following loan amortization table by selecting the correct answers.
Notes:
As all values are denominated in U
.
S
.
dollars, you do not have to enter any dollar signs.
Round all interest payments down to the nearest whole dollar.
Rounding creates a situation in which the numbers in the loan's final payment are often unequal. Notice in this problem, the ending
balance for payment
6
is
-
$
2
.
Therefore, your final payment would actually be reduced by $
2
to $
2
6
,
9
0
3
.
In the real world, to
prevent over paying, you should call the lender to learn the actual amount due.
Note: Remember to round down to the nearest dollar
The total of the Interest column indicates the amount of interest expected to be paid over the life of the loan, and the sum of the Payment column
details the total paid
(
$
1
6
1
,
4
3
0
)
to purchase your $
1
4
5
,
7
5
0
home.