Answer Happy

1. You have found your first home that you want to
purchase for a price of $180,000. You met with your local bank and
you got approved for a mortgage with the following terms: Interest
is fixed at a rate of 4% p.a.; payments need to be made on a
monthly basis, with the first payment due one month after the
purchase is finalized; the bank requires you to make fixed and
equal payments for each of the 60 months, after which the mortgage
is fully paid off; the bank is willing to finance 80% of your
purchase.
Answer the following questions and please clearly
indicate which answers relate to which question. Please type down
your step by step calculation to get partial credits. If you use
formulas or excel functions, please indicate which formulas or
functions you are using and what are your
inputs.
1. What is the dollar amount the
bank is willing to
finance?
2. What is the monthly payment for
this mortgage?
3. What is the total amount of
dollars of interest you are paying over the entire 5-year
period?