Ferguson Financial Case

The cost of the property is $21,500
•You will finance 80% of the purchase price. Using 5% as the interest on your 30-year fixed rate mortgage, calculate the monthly payment using the factor table from the textbook.

Finance Amount = 21500 * 80% = $17,200
Interest Rate = 5%
Period = 30 years
Annual Payment = 17200/15.3725 = $1118.88
•Calculate the payment using the same 5%, but for a 15-year mortgage.

Finance Amount = 21500 * 80% = $17,200
Interest Rate = 5%
Period = 15 years
Annual Payment = 17200/10.3797 = $1657.08
•Real estate taxes amount to 1% of the sales price and the insurance premium is .5% of the sales price per year. Calculate the total monthly PITI payment.

Real Estate Taxes = 1% of 21500 = 215
Insurance Premium = 0.5% of