Question 1:

Joe Smith decides to finance his $250,000 new house over 30 years. Assume he borrowed 80% of the cost of the house and the annual interest rate is 6%

1) What is his monthly payment

2) How much interest is paid over all the life of the 30 year loan?

3) How much will Joe owe on this loan after his 180th monthly payment?

Question 2:

Ms. Able borrows $15,000 for 5 years and is making annual payments. Provide a loan amortization table for the five annual payments. The annual interest rate is 4%.