Exam 13: Loan Amortization: Mortgages

A $200,000 mortgage at 6.2% compounded semi-annually with a 25-year amortization requires monthly payments. The mortgage allows the borrower to "double up" on a payment once each year. How much will the amortization period be shortened if the mortgagor doubles the tenth payment?

If the loan payments and interest rate remain unchanged, will it take longer to reduce the balance from $20,000 to $10,000 than to reduce the balance from $10,000 to $0? Explain briefly.

A $100,000 mortgage at 7.1% compounded semi-annually with a 20-year amortization requires monthly payments. How much will the amortization period be shortened if a $10,000 lump payment is made along with the 12^th payment and payments are increased by 10% starting in the third year?

How much interest would you pay during the last year of a 48-month, $20,000 car loan? The interest rate is 13.2% compounded monthly?

A $200,000 mortgage at 5.5% compounded monthly is amortized over 20 years. What is the amount of the monthly payment?

Sally is considering purchasing a condo that will have monthly payments of $800 per month. Property taxes along with heating costs will total $225 per month. Her monthly credit card bills total $150 per month and her car payments are $600 per month. If Sally's gross monthly income is $3,500 per month, determine her Gross Debt Service Ratio.

A loan of $10,000 at 9.5% compounded monthly is repaid by monthly payments for four years. How much interest is paid in the third year of the loan?

How much interest would you pay in total on a 48-month, $20,000 car loan at 13.2% compounded monthly?

Gloria purchased a $45,000 vehicle by financing it through a 3.8% rate of interest compounded monthly over 5 years. At the end of the 3^rd year, Nancy received an inheritance that allowed her to pay off the balance. Determine the balance of the vehicle at the end of year 3.

Jason purchased a car for $32,000 and arranged the monthly financing at 6.85% compounded semi-annually over five years. Two years later, he received an inheritance and decided to pay the loan balance in full. How much did Jason owe?

A loan of $49,600 is to be amortized by monthly payments of $1,000. How much interest will be included in the 31^st payment if the interest rate is 10.8% compounded monthly?

Miss Jones borrowed $10,000 at 12% compounded monthly, and agreed to pay back the loan by equal monthly payments over five years. After making the first 10 payments on time, she missed the next four payments. -How much extra interest did Miss Jones have to pay because of the late payments?

The Dawsons are refinancing their 20-year mortgage of $200,000 after five years. They have decided to increase their monthly payment by $300. If interest is 5.25% compounded quarterly, by how much will the Dawson's reduce the amortization period of their mortgage?

A mortgage loan of $132,000 at 7% compounded semi-annually is to be amortized over 25 years by equal monthly payments. How much interest will be included in the 48^th payment?

The Bingham family had a Loan to Value Ratio of 75%. If they had saved $95,000 as a down payment for a home, determine the value of the property, they were to purchase.

An $80,000 loan is amortized by monthly payments over 25 years. The interest rate charged is 10% compounded semi-annually. -How much interest will be paid during the first three years?

A loan of $49,600 is to be amortized by monthly payments of $1,000. How much principal will be repaid by the first payment if the interest rate is 10.8% compounded monthly?

Semi-annual payments of $5,000 are to be made on a $70,000 loan at 14% compounded semi-annually. A smaller, final payment will be made at the end of the amortization period. What will be the size of the final payment?

A car loan of $18,290 is to be repaid by equal monthly payments for three years. The interest rate is 1.8% compounded monthly. How much interest will be included in the first payment?

Jakob borrowed $27,000 for a car. He is making monthly payments of $494.81 at 3.8% compounded monthly. Construct a partial amortization schedule showing details of the first two payments, payments 33 and 34, and the last two payments.