## ally7343 2 years ago 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?

1. jim_thompson5910

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)

2. jim_thompson5910

so if she pays a total of \$691,880 (ignoring the down payment), then we can say monthly payment = (Total Cost)/(Number of Payments)

3. jim_thompson5910

tell me what you get for the monthly payment

4. ally7343

I got 1921.88

5. jim_thompson5910

same here, well I got 1,921.88888888889 and that rounds to 1,921.89 but that's close enough

6. ally7343

Okay thank you! Mind helping with a few more?(:

7. jim_thompson5910

sure

8. jim_thompson5910

what's the question

9. ally7343

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?

10. jim_thompson5910

There's a formula to calculate monthly payments, but it's easier to use a calculator

11. jim_thompson5910

which one do you want to use?

12. ally7343

Either.

13. jim_thompson5910

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

14. jim_thompson5910

oh when i mean "hit enter" i meant "hit calculate"

15. ally7343

\$447.87?

16. jim_thompson5910

i'm getting the same

17. ally7343

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?

18. jim_thompson5910

let me look up what the 30/5 means real quick, one sec

19. jim_thompson5910

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

20. jim_thompson5910

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

21. jim_thompson5910

remember that calculator link I sent you?

22. ally7343

yea

23. jim_thompson5910

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"

24. jim_thompson5910

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

25. ally7343

Alright, I got that part done.

26. jim_thompson5910

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

27. jim_thompson5910

oh sry, i meant to say 1,121,213.41

28. jim_thompson5910

and you would round this to the nearest dollar (like they instruct) to get 1,121,213

29. ally7343

Alright thank you.

30. jim_thompson5910

np