You want to purchase a house that is priced at $85,000. You can get a loan for 80 percent of the bank’sappraised value at 15.25% for 30 years with monthly amortization. The bank’s appraiser has a theorythat the value of a house is 95% of the asking price and appraises it accordingly. What will be your monthly payment if you take the loan?
Set up an amortization schedule for years 1 through 5 for Problem 5 showing annual mortgage payment amounts, yearly mortgage balances, principal, and interest for each year (total). (Do not do a monthly amortization schedule to answer this problem, but do assume monthly compound ing . Hint: Multiply the monthly payment in Problem 5 times 12 to get total annual payments)