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Calculate the monthly payment on the mortgage

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Reference no: EM133024898

Question - Your bank has offered you a 10-year, $100,000 mortgage with monthly payments. The bank is charging 1.5 points and a $750 "processing" fee, both are deducted from the mortgage when it is given. The APR on the mortgage is 12%.

a. Calculate the monthly payment on the mortgage, show the amortization table, and compute the EAR.

b. Will the EAR of the mortgage change if the term of the loan is 6 years?

c. Compute the total interest paid in each of the year of the mortgage.

Data

A Monthly Mortgage

Mortgage principal 100,000

Annual interest rate 12%

Monthly interest rate 1%

"Points" 1.50

Origination Fee 750.00

Mortgage term (years) 10

Reference no: EM133024898

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