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How much would have to be able to afford to pay each month

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Reference no: EM132998068

Aya and Harumi would like to buy a house and their dream house costs $500,000. They have $50,000 saved up for a down payment but would still need to take out a mortgage loan for the remaining $450,000 and they're not sure whether they could afford the monthly loan payments. The bank has offered them an interest rate of 3.75%, compounded monthly.

Problem 1: How much would they have to be able to afford to pay each month in order to pay off their mortgage in 25 years?

Problem 2: What is the total amount that would be paid to the lender after 25 years of payments?

Reference no: EM132998068

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