Question: Problem Mortgage (Setup) - You are purchasing a house that costs $500,000. You plan on making a down payment of $100,000 (i.e., your equity) and

Problem Mortgage (Setup) - You are purchasing a house that costs

Problem Mortgage (Setup) - You are purchasing a house that costs $500,000. You plan on making a down payment of $100,000 (i.e., your equity) and borrowing the difference (i.e., your debt). The terms of your mortgage will be $400,000 in principal, a 30-year term, and a fixed APR of 3.875%. The loan payments are monthly and interest is compounded monthly. Use this information to answer the following questions. - Problem - Mortgage 4 As an amortizing loan, mortgage payments are comprised of interest expense and principal repayment. Compute the interest component of the 61st payment. (Hint: the answer to the previous problem will help.)

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