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Calculate the total amount of interest paid

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Reference no: EM132664190

You are thinking of purchasing a house that costs $235,000. You have $12,000 in cash for a down payment, but you need to borrow the rest of the purchase price. Assume there are no closing costs. The bank is offering a 30-year mortgage that requires monthly payments and has an annual interest rate of 4.25%. What will your monthly payments be if you sign up for this mortgage? Draw the amortization schedule on a monthly basis using Excel. Calculate the total amount of interest paid throughout the life of the loan. Make a graph depicting the changes in the portions of interest and principal for each monthly payment throughout the life of the loan.

Suppose you have the option to take out a 15-year mortgage with an annual interest rate of 3.55%. What would the monthly payment be for this mortgage? Draw a new amortization schedule in a separate Excel sheet. Calculate the total amount of interest paid throughout the life of the loan. How much would you save if you choose the 15-year over the 30-year mortgage?

Reference no: EM132664190

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