Amortization of a $1000 Loan
Interest Monthly payment
rate
15yr 20yr 25yr 30yr
9.5% $10.45 $9.33 $8.73 $8.41
10.0% $10.75 $9.66 $9.09 $8.78
10.5% $11.06 $9.99 $9.45 $9.15
11.0% $11.37 $10.33 $9.81 $9.53
11.5% $11.69 $10.66 $10.16 $9.90
12.0% $12.01 $11.01 $10.53 $10.29
12.5% $12.33 $11.36 $10.90 $10.67
13.0% $12.66 $11.72 $11.28 $11.06
a. What is the monthly payment on a 25-year loan of $125,000 if the
annual interest is 9.5%
b. What are the total interest charges over the life of the loan?
This looks like an exercise in Table reading, but the table is hard to read.
The 25-yr load entry in the 9.5% interest row is $8.73. That would be the monthly payment. 25 years is 300 months, so the total amount repaid would be $8.73 times that, or $2619.00
Of that amount, $1619.00 would be interest charges over the life of the loan. The rest is the return of the $1000 principal.
What is the monthly payment on a 25-year loan of $125,000 if the
annual interest is 9.5%
So for the 125,000 loan
monthly payment will be 8.73*125000/1000 = 1091.25
What are the total interest charges over the life of the loan?
1091.25*300 = 327375
Total Interest = 327375-12500 = 202375
Is this correct
Can Please someone check as per below I posted this yesterday and Drwls Answered and I post back the solution.
Thanks
Amortization of a $1000 Loan
Interest Monthly payment
rate
15yr 20yr 25yr 30yr
9.5% $10.45 $9.33 $8.73 $8.41
10.0% $10.75 $9.66 $9.09 $8.78
10.5% $11.06 $9.99 $9.45 $9.15
11.0% $11.37 $10.33 $9.81 $9.53
11.5% $11.69 $10.66 $10.16 $9.90
12.0% $12.01 $11.01 $10.53 $10.29
12.5% $12.33 $11.36 $10.90 $10.67
13.0% $12.66 $11.72 $11.28 $11.06
a. What is the monthly payment on a 25-year loan of $125,000 if the
annual interest is 9.5%
b. What are the total interest charges over the life of the loan?
For Further Reading
Maths - drwls, Wednesday, March 12, 2008 at 3:00pm
This looks like an exercise in Table reading, but the table is hard to read.
The 25-yr load entry in the 9.5% interest row is $8.73. That would be the monthly payment. 25 years is 300 months, so the total amount repaid would be $8.73 times that, or $2619.00
Of that amount, $1619.00 would be interest charges over the life of the loan. The rest is the return of the $1000 principal.
Maths - Jen, Wednesday, March 12, 2008 at 4:59pm
What is the monthly payment on a 25-year loan of $125,000 if the
annual interest is 9.5%
So for the 125,000 loan
monthly payment will be 8.73*125000/1000 = 1091.25
What are the total interest charges over the life of the loan?
1091.25*300 = 327375
Total Interest = 327375-12500 = 202375
Is this correct
To find the monthly payment on a loan using the given interest rates and loan amounts, you can refer to the table provided. Simply locate the row that corresponds to the desired interest rate and find the value under the column that represents the loan term.
a. To calculate the monthly payment for a 25-year loan of $125,000 with an annual interest rate of 9.5%, you will refer to the row that corresponds to the 9.5% interest rate and the 25-year loan term. The value in the table provided is $9.45. Therefore, the monthly payment will be $9.45 for every $1,000 borrowed. To calculate the monthly payment for the $125,000 loan, you multiply the value in the table by the loan amount:
Monthly payment = $9.45 * ($125,000 / $1,000) = $1,181.25
Therefore, the monthly payment on a 25-year loan of $125,000 with a 9.5% interest rate is $1,181.25.
b. To calculate the total interest charges over the life of the loan, you will need to determine the total number of months in the loan term and subtract the loan amount. Then, multiply the monthly payment by the number of months and subtract the loan amount:
Total interest charges = (Monthly payment * Number of months) - Loan amount
For a 25-year loan, there are 25 years * 12 months per year = 300 months. The loan amount is $125,000. Using the monthly payment calculated above ($1,181.25), the total interest charges can be calculated as follows:
Total interest charges = ($1,181.25 * 300) - $125,000 = $354,375 - $125,000 = $229,375
Therefore, the total interest charges over the life of the loan amount to $229,375.