Westonci.ca offers fast, accurate answers to your questions. Join our community and get the insights you need now. Get immediate and reliable answers to your questions from a community of experienced professionals on our platform. Experience the ease of finding precise answers to your questions from a knowledgeable community of experts.
Sagot :
The increase in monthly amortization has result of higher interest rate is $349.86.
We have given ,the smiths were just approved for a 25 year mortgage at an 11% fixed rate. if they had not filed bankruptcy in the past, they could have gotten a rate of 7%.
We have to calculate the mortage value when loan amount is,$128,000,
What is the amortization formula?
[tex]A = P \times ((r(1+r)^n)/((1+r)^n-1))[/tex]
A = is the amortization
P = is the principal
r = is the rate
n = is the period
We have to compute for the amortization using the 11% interest rate.
[tex]A = $128000 \times ((0.11(1.11)^{25})/((1.11)^{25}-1))[/tex]
[tex]A = \$1,254.54[/tex]
When we solve manually, the answer should be divided by 12 because it was on a monthly basis.
Next we have to compute for the amortization using the 7% interest rate.
[tex]A = $128000 \times ((0.07(1.07)^25)/((1.07)^25-1))[/tex]
[tex]A = $904.68[/tex]
When solve manually, the answer should be divided by 12 because it was on a monthly basis.
Therefore, the increase in monthly amortization has result of higher interest rate is $349.86.
To learn more about the amortization visit:
https://brainly.com/question/10561878
We appreciate your visit. Hopefully, the answers you found were beneficial. Don't hesitate to come back for more information. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Thank you for trusting Westonci.ca. Don't forget to revisit us for more accurate and insightful answers.
