Thursday, May 10, 2007

Personal Finance

Hi everyone i am sorry that i haven't been blogging properly for stupid reasons. I cant get the pictures with my computer because it's still not working that great.

Yesterday we worked on a couple of questions and i am still a bit confused but i am getting there.

We had to find monthly payments, total mortgage, total interest, and total savings.

An example of the questions is this and i am sorry i cant get the slides to show up on my computer.

to find the monthly payment of the question, the 25 years of mortgage was turned into months by:
multiplying the # of years by the # of months in a year and it gives you 300 but that is still not finding the monthly payments amount so, we put this in the calculator:
PV=121000 because this is the mortgage that they will require.
PMT=-847.50 because you need it at 0 so you can get this answer and this is the monthly payment.
P/Y= 12
C/Y= 2

To get the total mortgage after 15 years you take the monthly payment and multiply it by the # of months so: $847.50 x 300 and you get $254250.00 as the total mortgage after 15 years.
to get the total interest you take the total mortgage and subtract it by the mortgage they require so: $254250.00 - $121000 and you get $133250.00 as the total interest you will have to pay. Then to get the total saving of the other years from part a you find the difference between the two so you take $133250.00 - the answer from part a and it equals $5628 as the total savings.