Videos: Mortgages and Amortization, part 1

Intro to Mortgages

You have just purchased a new house and taken a mortgage for $100,000.  The interest rate is 12% compounded monthly and you will make payments for 25 years.

1. Find the size of the monthly payment.
2. The bank has a policy of rounding the payments up to the next cent.  Find the new monthly payment and compute a new n.
3. What was the balance of the loan after three periods?
4. How much of your third payment was Principal?  Interest?
5. How much did you pay in the first year?
6. How much of that was principal?
7. How much of that was interest?
8. What was the balance of the loan at the end of the first year?
9. How much interest did you pay in the third year?
10. Assuming the mortgage stays at the same rate until maturity, find the size of your last payment.
11. Fill out the Amortization Table for the first year

More Vocabulary

Chapter Attribution

Video chapter in Business Mathematics by Chris Kellman, Leslie Major, Don Mallory, Frank Gruen, and Amy Goldlist shared under a CC BY-NC license.