The monthly payments for such a loan would be $990. 58. Over the life of the loan, therefore, the total payments add up to $356,608. 80 with interest at $221,608. 80, which is calculated in the following manner: $990. 58 x 360 = $356,608. 80. From this is taken the initial cost of the house or the loan’s principal: $356,608. 80 – $135,000 = $221,608. 80.
The amortization schedule given for this loan shows a very slightly different total for the interest paid: $221,609. 58. However, this represents a difference of less than one dollar. b. In the event that an extra payment of $5000 will be made regularly in January of every year, calculations yield the following results: Instead of on February 6, 2038, the loan would be paid off on February 6 of 2021. This removes 17 years from the life of the loan.
The average monthly payment officially remains the same, though according to the amortization schedule, the part of that going toward the principal climbs at a higher rate than before. The total interest is $84,471. 15. Taking this amount from the previous interest ($221,609. 58 – $84,471. 15) is $137,136. 43. c. How much required annual income is required for a mortgage loan of $135,000. 00 amortized over 30 years at a nominal interest rate of 6. 0% to 7. 75%?