1. Suppose you decide to purchase a $150,000 home using an inheritance of $20,000 as your down payment. A down payment is subtracted from the total cost of the home and therefore you owe $130,000. To pay for this amount you will need a loan, so $130,000 is the principal on your loan. Suppose the interest rate on a 30 year mortgage is 4.75%.

   1. What will your monthly payment be?

   2. How much will you pay on the loan if you pay off the loan as scheduled?

   3. The cost of a loan is the total amount of interest paid. What is the cost of this loan?

   4. Create an amortization table for this loan.

   5. What portion of the first payment is interest? What portion of the 180th payment is interest? What portion of the last payment is interest?

   6. How much would you save in interest if you paid an extra 10% per month?

   7. How much faster would you pay off the loan if you paid an extra 10% per month?