Using the Loan Amortization Schedule supplied in Canvas, please answer all the questions that follow: 1. Amy wants to take out a mortgage and qualifies for a $170,000 loan at an interest rate of 4%. She is debating the pros and cons of a 30 year mortgage but believes it will be her best option. 1. What is her monthly payment assuming no money down? 2. How much total interest will be paid if she makes all 360 minimum payments? 3. How much total interest has been paid with the 10th payment? 4. How much total interest has been paid with the 36th payment? 5. Briefly describe what happens to the total interest at 10 months, 36 months and the total interest paid if one additional payment per year is made. Include the numbers! 2. Steven would like to know the difference between a 30 year fixed mortgage at 4% and a 15 year fixed rate mortgage at 3%. He can afford a $250,000 mortgage and has a house in mind. 1. What are the monthly payments for each? 2. What is the difference in total interest paid between the 30 year and the 15 year? 3. If Steven paid $150 more each month on a 30 year mortgage how many years would it take to completely pay the mortgage off? 4. If Steven paid $75 more each month on a 15 year mortgage how many years would it take to completely pay the mortgage off? 5. If Steven could choose either, which would you recommend and why? Include the numbers! 3. Mikaela is considering a used Ford Explorer. She has found one with a list price of $12,500 and can get a 5 year loan at 2.9%. 1. What are her monthly payments? 2. How much total interest is paid if she makes all the payments? 3. What happens to the monthly payment is Mikaela puts $2,000 down as a down payment? 4. What happens if Mikaela puts $2,000 down AND pays an extra $50 on each monthly payment? 5. What is the interest payment at payment \# 70 ? 4. Joseph is considering a used car currently valued at $13,000. He can get an interest rate of 3.25% annually for a 5 year car loan. Joseph currently has $14,000 in a savings account and wants to use some of his savings for a down payment. 1. If Joseph decided to put $3,000 down as a down payment, what are his monthly payments? 2. If Joseph decided to put $5,000 down as a down payment, what are his monthly payments? 3. How much does Joseph save in interest if he puts $5,000 down compared to $3,000 ? 4. If Joseph decides to pay for the whole thing what could he potentially save in interest payments? 5. If Joseph can invest $13,000 in an 8% annual investment. Alternatively he is considering just paying cash for the car leaving him no payment. Which would you recommend and why? Include the numbers
