Purchase Solution

Buying a house and making monthly payments

Not what you're looking for?

Ask Custom Question

Please show formula and calculation:

1) You want to buy a house and wish to borrow $300,000. What would the monthly payment be if the loan requires equal monthly payments for 30 years at an interest rate of 5% of apr. What would your outstanding loan balance be immediately after you make your first payment?

2) You are panning on how much you need to save for retirement. You expect to live for 30 years in retirement and would like to spend $100,000 (in real terms) per year, while leaving a $1 million bequest to UCLA when you die at the end of the 30th year. You are 35 years away from retirment. How much do you need to save at the end of the 30th year. you are 35 years away from retirement. How much do you need to save a tthe end of each year if you earn 5% real (after-inflastion) during your working years and 3% during your retirement yeas? Solve the problem in three different ways:
a. With a financial calculator
b. On a spreadsheet
c. Using the formulas for the present value of an annuity and for a loan payment

Purchase this Solution

Solution Summary

The expert examines buying a house and making monthly payments.

Solution Preview

Please see attachment.

1) You want to buy a house and wish to borrow $300,000. What would the monthly payment be if the loan requires equal monthly payments for 30 years at an interest rate of 5% of apr? What would your outstanding loan balance be immediately after you make your first payment?
Loan amount $300,000 (A)
Duration 30 (B)
Compounding 12 (C)
Interest rate 5% (D)
Monthly payments $1,610 =A/((1 - ((1 + (D/C)^(-B * C)))/(D/C))

LOAN AMORTIZATION SCHEDULE
Month Beginning ...

Solution provided by:
Education
  • B. Sc., University of Nigeria
  • M. Sc., London South Bank University
Recent Feedback
  • "Thank you."
  • "thank you Chidi Ngene.. if you have any APA references would be great"
  • "Thank you so much for your help, your explanations were easy to understand and apply!"
  • "are you able to highlight the equations used either on the xlsx or a word doc as to how each graph was formed- overall looks fine i just need help understanding this myself"
  • "Chidi Ngene, M. Sc. Was extremely helpful as without the help and guidance I would have failed, but with the help I passed. I still have a lot to learn and in need of the guidance to understand and learn more on the subject. I would recommend Chidi Ngene and BrainMass to anyone that are in need of help. Thank you!!"
Purchase this Solution


Free BrainMass Quizzes
Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Introduction to Finance

This quiz test introductory finance topics.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Basics of corporate finance

These questions will test you on your knowledge of finance.