What monthly payment is required in order to pay off loan

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Reference no: EM131566983

Suppose your house appraises for $425,000 at the time of purchase and that you agree to pay this amount to the seller. You make a down payment of 10% and finance the rest with a 15 year mortgage in which you make the same payment at the end of each month to pay off the balance. The annual interest rate is 2.8% and interest is compounded monthly.

(a) What monthly payment is required in order to pay off the loan with 15 years of equal payments made at the end of each month?

(b) You are required to pay mortgage insurance until your loan balance reaches 78% of the appraisal value. How many payments do you have to make until your mortgage servicer stops collecting the mortgage insurance?

Reference no: EM131566983

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