Problem:
You plan to purchase a $180,000 house using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is 6.25 percent. You will make a down payment of 15 percent of the purchase price.
Required:
Question 1: Calculate your monthly payments on this mortgage.
Question 2: Calculate the amount of interest and, separately, principal paid in the 25th payment.
Question 3: Calculate the amount of interest paid over the life of this mortgage.
Note: Be sure to show how you arrived at your answer.