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Mortgage Calculations for Ms. Rigsby: Payments, Loan Balance, and Interest Overview

This document outlines key calculations regarding Ms. Rigsby's mortgage. After making a $40,000 down payment on a $165,000 home and securing a 20-year loan at a 6% interest rate compounded monthly, we’ll analyze her financial commitments. The monthly payment is established at $895.54. We'll calculate the loan balance at the end of the tenth year, identify the first payment where interest is less than the principal repayment, and determine the total interest paid over the life of the mortgage.

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Mortgage Calculations for Ms. Rigsby: Payments, Loan Balance, and Interest Overview

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  1. Q1: Ms. Rigsby made a $40,000 down payment on a $165,000 house and took out a 20 year mortgage (at 6% compounded monthly) on the balance. How much will the monthly payments be?(We earlier found that R = $895.54.)(a) What is the loan balance at the end of the tenth year ?

  2. Q2: Ms. Rigsby made a $40,000 down payment on a $165,000 house and took out a 20 year mortgage (at 6% compounded monthly) on the balance. How much will the monthly payments be?(We earlier found that R = $895.54.)(b) What is the first payment for which the interest paid is less than the amount paid on principal ?

  3. Q3: Ms. Rigsby made a $40,000 down payment on a $165,000 house and took out a 20 year mortgage (at 6% compounded monthly) on the balance. How much will the monthly payments be?(We earlier found that R = $895.54.) (c) What is the total amount of interest paid over the term of the loan ?

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