Suppose you take a 30-year mortgage of $300000. the annual interest rate is 4%, and the annual ... Question: Suppose you take a 30-year mortgage of $300000. The annual interest rate is 4%, and the annual AP... (2 bookmarks) Suppose you take a 30-year mortgage of $300000. The annual interest rate is 4%, and the annual APR is 5.00%. Loan payments are made annually. Calculate the amortized fees and expenses for this loan (in dollars, provide your answer with $1 precision). Answer: 2166 +/- 1

This is the steps to solve this problem, but I want to know how to do it by hand or calculator by hand(not excel) Please help!

Given loan term=30 years =nper

Loan amount =$300,000=PV

Annual interest rate=4%.=rate

So, the periodic payment can be calculated using PMT function of excel=PMT(rate,nper,pv,[Fv],[type])

Substituting the values in the formula

=PMT(.04,30,-300000,,0) HOW TO DO THIS<-----

=$17,349.03.---------(1)

If the APR is 5%, then effective cost of the loan is calculated by replacing 4% with 5% in the above formula ie.,

=PMT(.05,30,-300000,,0) AND HOW TO DO THIS<-----

=$19,515.43.----------(2)

The difference between (2) and (1) is nothing but the amortized fees and expenses i.e,

$19,515.43 - $17,349.03.

=$2,166.40

Answer rating: 100% (QA)

To calculate the periodic payment and the effective cost of the loan by hand or using a calculator y... View the full answer