Anand purchased a 30 year mortgage at 6.00% convertible monthly. The amount of the loan is for $200,000. Anand plans to make the required monthly payments. The first month that his outstanding balance is $100,000 or less, he plans to purchase a larger home. How many monthly payments will Anand need to make?

252

Explanation:

In this question we use the PMT and the NPER formula which is to be shown in the attachment below:

Given that,  

Present value = $200,000

Future value or Face value = $0

RATE = 6% ÷ 12 = 0.5%

NPER = 30 years × 12 months = 360 months  

The formula is shown below:  

= PMT(RATE;NPER;-PV;FV;type)  

The present value come in negative  

So, after solving this, the pmt is $1,199.10

Now NPER is

Given that,  

Present value = $200,000

Future value or Face value = $100,000

RATE = 6% ÷ 12 = 0.5%

PMT = $1,199.10

The formula is shown below:  

= NPER(RATE;PMT;-PV;FV;type)  

The present value come in negative  

So, after solving this, the pmt is 251.82

answervulnerability assessment;

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.