You have been approved for a $80,000 loan toward the purchase of a new home at 15% interest. The mortgage is for 30 years.
1. How much are the approximately annual payments of the loan?
Hint: Assume you pay yearly.
2. How much of your first payment will go towards the principal and how much towards the interest in year 1? What about in year 2?© BrainMass Inc. brainmass.com February 24, 2021, 6:52 pm ad1c9bdddf
1. The annual payments would be such that the present value of payments is equal to the loan amount. The annual payments are an annuity and so we ...
The solution explains how to calculate the annual payments on a loan and the break up between principal and interest for the first repayment