1. Consider a $250,000, 3.75 percent, 30-year, constant payment mortgage (CPM) with monthly payments?

1. Consider a $250,000, 3.75 percent, 30-year, constant payment mortgage (CPM) with monthly payments.

What is the required monthly payment on this mortgage?
If the first payment on this loan is on January 1 of this year, how much total interest will be paid on this mortgage this year?
If the first payment is on July 1 on this year, how much total interest will be paid this year?
What will be the principal balance outstanding at the end of the first year?

2. Now consider a $250,000, 5 percent, 5-year, interest-only period, with monthly interest payments.

How large are each of the monthly payments?
What will be the principal balance outstanding on this mortgage after five years?

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