Understanding your mortgage helps you make better financial decisions. Instead of just accepting offers blindly, it is wise to look at the numbers behind any loan?especially a significant loan like a home loan. People tend to focus on the monthly payment, but there are other important features that you can use to analyze your mortgage, such as:

• ?Comparing the monthly payment for several different home loans
• ?Figuring how much you pay in interest monthly, and over the life of the loan
• ?Tallying how much you actually pay off over the life of the loan versus the principal borrowed to see how much
• you actually paid extra
• To calculate a mortgage, you need a few details about the loan. Then, you can create a Java program to perform the calculations to crunch the numbers.
• The Inputs
• Start by gathering the information needed to calculate your payments and understand other aspects of the loan. You need the details below:
• ?The loan amount or principal, which is the home purchase price plus any other charges, minus the down payment.
• ?The annual interest rate on the loan.
• ?The number of years you have to repay, also known as the term.
• ?The number of payments per year, which would be 12 for monthly payments.
• The calculation for fixed loans, use the formula below to calculate the payment.

P*r*(1 +r)\" Month! P0. or = y ""8 (1+r)N1 Where: a P is the loan amount o r is the "monthl '= "annual" interest rate / 12 a N is the total number of payments = annual payments * number of years Example Payment Calculation Assume you borrow $100,000 at 6% for 30 yea rs, to be repaid monthly. What is the monthly payment? 0 P = 100000.00 o r = (6.0/ 100) I 12 = 0.005 I/ remember that 6% = 6/ 100 o N = 12 "' 30 = 360 M m P t 100000 a: 0.005 ... (1 + 0.005)\"0 599 55 an a. 8'". = = . y 3\"" (1 + 0.005)360 1 The monthly payment is $599.55. Your task: a) Create a program that reads the inputs from the keyboard b) Create variables to hold the loan amount, annual interest rate, number of years and number of payments per year. USE MEANINGFUL variable names here! c} Compute and store the monthly interest rate r d) Compute and store the total number of payments e} Compute the monthly payment using the above equation f} Print the following statement (*): Loan Amount: $100,000.00 Annual Interest Rate: 6.00 % Number of Years: 30 years Number of Payments per year: 12 payments Monthly Payment: $ 599.55 Total Payment at the end of the loan: $215,838.00