#1) On June 1, you borrowed $195,000 to buy a house. The mortgage rate is 5.20...

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#1) On June 1, you borrowed $195,000 to buy a house. Themortgage rate is 5.20 percent. The loan is to be repaid in equalmonthly payments over 15 years. How much of the first paymentapplies to the principal balance? $714.43 $722.50 $717.51 $756.70$658.56
#13) You want to borrow $34,800 and can afford monthly paymentsof $960 for 48 months, but no more. Assume monthly compounding.What is the highest APR rate you can afford?
13.18 percent
14.52 percent
9.24 percent
13.67 percent
14.82 percent

Answer & Explanation Solved by verified expert

3.6 Ratings (640 Votes)

1)	$717.51

Working:
Monthly repayment	=	=pmt(rate,nper,-pv)
	=	$ 1,562.44

Where,
rate		5.20%/12	=	0.0043333
nper		15*12	=	180
pv			=	$ 1,95,000

Interest expense	=	Loan amount * Monthly interest rate
	=	$ 1,95,000	*	0.0043333
	=	$ 845.00

First month payment applied to principal balance			=	Monthly repayment	-	Interest expense
			=	$ 1,562.44	-	$ 845.00
			=	$ 717.44
Difference of $ 0.07 is due to rounding off difference.

2)	14.52%

Working:

APR	=	=rate(nper,pmt,-pv)*12
	=	14.52%

Where,

nper		48
pmt		$ 960
pv		$ 34,800

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Transcribed Image Text

#1) On June 1, you borrowed $195,000 to buy a house. Themortgage rate is 5.20 percent. The loan is to be repaid in equalmonthly payments over 15 years. How much of the first paymentapplies to the principal balance? $714.43 $722.50 $717.51 $756.70$658.56#13) You want to borrow $34,800 and can afford monthly paymentsof $960 for 48 months, but no more. Assume monthly compounding.What is the highest APR rate you can afford?13.18 percent14.52 percent9.24 percent13.67 percent14.82 percent