SECTION 10 2 Monthly Payment and Total Interest

  • Slides: 16
Download presentation
SECTION 10 -2 Monthly Payment and Total Interest pp. 346 -348

SECTION 10 -2 Monthly Payment and Total Interest pp. 346 -348

SECTION 10 -2 Section Objective Determine: • monthly payment • total amount paid •

SECTION 10 -2 Section Objective Determine: • monthly payment • total amount paid • total interest charged MBA, Section 10 -2, Slide 2 of 16

SECTION 10 -2 Key Words to Know interest (p. 346) The amount of money

SECTION 10 -2 Key Words to Know interest (p. 346) The amount of money paid for the use of a lender’s money. MBA, Section 10 -2, Slide 3 of 16

SECTION 10 -2 Formula 1 Monthly = Amount of Mortgage × Monthly Payment $1,

SECTION 10 -2 Formula 1 Monthly = Amount of Mortgage × Monthly Payment $1, 000 for a $1, 000 Loan MBA, Section 10 -2, Slide 4 of 16

SECTION 10 -2 Formula 2 Amount Paid = Monthly Payment × Number of Payments

SECTION 10 -2 Formula 2 Amount Paid = Monthly Payment × Number of Payments MBA, Section 10 -2, Slide 5 of 16

SECTION 10 -2 Formula 3 Total Interest = Amount Paid – Amount of Mortgage

SECTION 10 -2 Formula 3 Total Interest = Amount Paid – Amount of Mortgage Charged MBA, Section 10 -2, Slide 6 of 16

SECTION 10 -2 The Hunt to Find a Home p. 346 Can you shop

SECTION 10 -2 The Hunt to Find a Home p. 346 Can you shop around for mortgage rates or are they all the same no matter where you go? MBA, Section 10 -2, Slide 7 of 16

SECTION 10 -2 Example 1 Carol and Adam Burke have applied for an $80,

SECTION 10 -2 Example 1 Carol and Adam Burke have applied for an $80, 000. 00 mortgage loan at an annual interest rate of 8. 00 percent. The loan is for a period of 30 years and will be paid in equal monthly payments that include interest. (Use the Monthly Payment for a $1, 000 Loan table on page 799 of your textbook. ) What is the total amount of interest charged? MBA, Section 10 -2, Slide 8 of 16

SECTION 10 -2 Example 1 Answer: Step 1 Find the monthly payment. Amount of

SECTION 10 -2 Example 1 Answer: Step 1 Find the monthly payment. Amount of Mortgage × Monthly Payment $1, 000 for a $1, 000 Loan $80, 000. 00 × $7. 34 $1, 000. 00 = $587. 20 MBA, Section 10 -2, Slide 9 of 16

SECTION 10 -2 Example 1 Answer: Step 2 Find the amount paid. Monthly Payment

SECTION 10 -2 Example 1 Answer: Step 2 Find the amount paid. Monthly Payment × Number of Payments $587. 20 × (12 months × 30 years) $587. 20 × 360 = $211, 392. 00 MBA, Section 10 -2, Slide 10 of 16

SECTION 10 -2 Example 1 Answer: Step 3 Find the total interest charged. Amount

SECTION 10 -2 Example 1 Answer: Step 3 Find the total interest charged. Amount Paid – Amount of Mortgage $211, 392. 00 – $80, 000. 00 = $131, 392. 00 MBA, Section 10 -2, Slide 11 of 16

SECTION 10 -2 Practice 1 (Use the Monthly Payment for a $1, 000 Loan

SECTION 10 -2 Practice 1 (Use the Monthly Payment for a $1, 000 Loan table on page 799 of your textbook. ) Selling price: $276, 000. Down payment: 25 percent. Terms: 8 percent for 15 years. What is the total interest charged? MBA, Section 10 -2, Slide 12 of 16

SECTION 10 -2 Practice 1 Answer $149, 205. 60 MBA, Section 10 -2, Slide

SECTION 10 -2 Practice 1 Answer $149, 205. 60 MBA, Section 10 -2, Slide 13 of 16

SECTION 10 -2 Practice 2 The Ekharts bought a home for $235, 000. They

SECTION 10 -2 Practice 2 The Ekharts bought a home for $235, 000. They made a down payment of 20 percent and financed the rest at 7 percent for 30 years. What is the monthly payment? What is the total amount to be paid? What is the interest charged? How much interest would they save if they financed the same amount at 7 percent for 15 years? MBA, Section 10 -2, Slide 14 of 16

SECTION 10 -2 Practice 2 Answer Monthly payment: $1, 250. 20 Total amount to

SECTION 10 -2 Practice 2 Answer Monthly payment: $1, 250. 20 Total amount to be paid: $450, 072 Interest charged: $262, 072 Interest they would save if they financed the same amount at 7 percent for 15 years: $145, 850. 40 MBA, Section 10 -2, Slide 15 of 16

END OF SECTION 10 -2 Monthly Payment and Total Interest

END OF SECTION 10 -2 Monthly Payment and Total Interest

Monthly Payment Mortgage Payment Breakeven 42 x 33Monthly Payment Mortgage Payment Breakeven 42 x 33
IRELAND 2018 Payment Options Automatic Monthly Payment PlansIRELAND 2018 Payment Options Automatic Monthly Payment Plans
Monthly Total Calls Update August 2016 KPIs TotalMonthly Total Calls Update August 2016 KPIs Total
Interest and Interest Rate Interest amount owed nowInterest and Interest Rate Interest amount owed now
Interest Groups History and Interest Group Formation InterestInterest Groups History and Interest Group Formation Interest
Interest and Interest Rate Interest amount owed nowInterest and Interest Rate Interest amount owed now
Calculating Simple Compound Interest Simple Interest Simple interestCalculating Simple Compound Interest Simple Interest Simple interest
Interest Groups Interest Groups Key Concepts Interest groupsInterest Groups Interest Groups Key Concepts Interest groups
INTEREST GROUPS 1 What Are Interest Groups InterestINTEREST GROUPS 1 What Are Interest Groups Interest
Interest Groups How Interest Groups Work Interest GroupsInterest Groups How Interest Groups Work Interest Groups
Calculating Interest Interest the cost of Simple InterestCalculating Interest Interest the cost of Simple Interest
8 Interest Groups 8 1 Interest Groups Interest8 Interest Groups 8 1 Interest Groups Interest
Introduction to Interest Rates Interest Rates Interest ratesIntroduction to Interest Rates Interest Rates Interest rates
Interest Groups The interest group universe Interest groupInterest Groups The interest group universe Interest group
Interest Groups Chapter 7 Interest Groups Interest groupsInterest Groups Chapter 7 Interest Groups Interest groups