1. Stefani is purchasing a house and finances $410,350 of the purchase price. The mortgage is a 30-year 7/3 ARM at 6.5% with a 4/13 cap structure. What will the remaining balance be after the first seven years?
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2. Maggie is financing $219,400 to purchase a home. How much money will she save over the life of a 15-year, fixed rate loan by buying 2 points with a rate of 5.83 instead of not buying points with the rate of 6.28%? Round to the nearest dollar.
Can someone check these for me
It would be surprising to see that in a 30 year mortgage, more than half is paid after 7 years. You may not have used the right formula.
What was the yearly payment?
A=amount of mortgage (410350)
R=1+annual rate (1.065)
n=number of years (periods)
from which you can solve for the payment P
Not the answer you are looking for? Search for more explanations.
n=30 (years) to solve for P (yearly payment)
The left-hand side shows what is owing, and the right hand side what has been paid.
They are equal at n=30 (paid off).
At n<30, say 7 years, the difference (left - right) is the balance owing.