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ally7343 Group Title

Help? Please and thank youu.[: Sofia has a 5.2% fixed rate 30-year mortgage in the amount of $350,000. The total cost of principal and interest is about $691,880. Which of the following is closest to Sofia’s monthly payment?

  • one year ago
  • one year ago

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  1. jim_thompson5910 Group Title
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    There are 12 months in a year, so there are 12*30 = 360 months in 30 years So Sofia is making 360 equal payments (maybe the last payment will be slightly smaller than the rest)

    • one year ago
  2. jim_thompson5910 Group Title
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    so if she pays a total of $691,880 (ignoring the down payment), then we can say monthly payment = (Total Cost)/(Number of Payments)

    • one year ago
  3. jim_thompson5910 Group Title
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    tell me what you get for the monthly payment

    • one year ago
  4. ally7343 Group Title
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    I got 1921.88

    • one year ago
  5. jim_thompson5910 Group Title
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    same here, well I got 1,921.88888888889 and that rounds to 1,921.89 but that's close enough

    • one year ago
  6. ally7343 Group Title
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    Okay thank you! Mind helping with a few more?(:

    • one year ago
  7. jim_thompson5910 Group Title
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    sure

    • one year ago
  8. jim_thompson5910 Group Title
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    what's the question

    • one year ago
  9. ally7343 Group Title
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    Bob has a 30-year adjustable rate mortgage that has a rate of 2.8% for the first 3 years. The amount of the mortgage is $109,000. What is the monthly payment during this initial period?

    • one year ago
  10. jim_thompson5910 Group Title
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    There's a formula to calculate monthly payments, but it's easier to use a calculator

    • one year ago
  11. jim_thompson5910 Group Title
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    which one do you want to use?

    • one year ago
  12. ally7343 Group Title
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    Either.

    • one year ago
  13. jim_thompson5910 Group Title
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    ok let's use the calculator here's a good one http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx if you type in 109000 in the first box, 30 in the box below that, then 2.8 in the box below that...then hit enter...you'll get your answer tell me what it gives you

    • one year ago
  14. jim_thompson5910 Group Title
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    oh when i mean "hit enter" i meant "hit calculate"

    • one year ago
  15. ally7343 Group Title
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    $447.87?

    • one year ago
  16. jim_thompson5910 Group Title
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    i'm getting the same

    • one year ago
  17. ally7343 Group Title
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    Okay. Emily obtains a $1,250,000 balloon mortgage for an investment property. The mortgage has terms of 30/5 at an interest rate of 3.5%. The monthly payment is $5,613.06. How much is the remaining balance after 5 years rounded to the nearest dollar?

    • one year ago
  18. jim_thompson5910 Group Title
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    let me look up what the 30/5 means real quick, one sec

    • one year ago
  19. jim_thompson5910 Group Title
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    hmm i think what the 30/5 means is that you pay the mortgage just as if it was a 30 year mortgage but at the end of 5 years, you would make a lump sum payment to pay off the remaining balance or refinance into some other type of mortgage that's what I'm reading here anyway http://www.mortgageqna.com/mortgage-loan-types/5-year-balloon-mortgage-different-from-a-5-1-arm.html

    • one year ago
  20. jim_thompson5910 Group Title
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    again, there's a formula to do this, but it's kinda a pain so that's why amortization calculators with amortization tables are very handy

    • one year ago
  21. jim_thompson5910 Group Title
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    remember that calculator link I sent you?

    • one year ago
  22. ally7343 Group Title
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    yea

    • one year ago
  23. jim_thompson5910 Group Title
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    ok now type 1250000 in the first box 30 in the box below that and 3.5 in the box below that then hit "Show/Recalculate Amortization Table"

    • one year ago
  24. jim_thompson5910 Group Title
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    what that does is show you how much you've paid off for a given month and how much you have left on your balance at any given period of time

    • one year ago
  25. ally7343 Group Title
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    Alright, I got that part done.

    • one year ago
  26. jim_thompson5910 Group Title
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    if you scroll to Feb 2018, which is exactly 5 years from now, you'll see the remaining balance is 1,148,801.82 so this is how much left you still have to pay off

    • one year ago
  27. jim_thompson5910 Group Title
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    oh sry, i meant to say 1,121,213.41

    • one year ago
  28. jim_thompson5910 Group Title
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    and you would round this to the nearest dollar (like they instruct) to get 1,121,213

    • one year ago
  29. ally7343 Group Title
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    Alright thank you.

    • one year ago
  30. jim_thompson5910 Group Title
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    np

    • one year ago
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