Question

Mark Macy is buying a house. The house costs $310,000. He plans to put $62,000 and borrow the balance at 3.97% for 30 years. Calculate the principal plus interest portion of his mortgage payment.

Answer 1

The principal plus interest portion of his mortgage payment.

Here, we have Loan Amount (P) = $248,000 [$310,000 - $62,000]

Annual interest rate (n) = 3.97% per year

Number of years (n) = 30 Years

Therefore, the Annual loan payment = [P x {r (1 + r)ⁿ} ] / [(1 + r)ⁿ – 1]

= [$248,000 x {0.0397 x (1 + 0.0397)³⁰}] / [(1 + 0.0397)³⁰ – 1]

= [$248,000 x {0.0397 x 3.215446731}] / [3.215446731 – 1]

= [$248,000 x 0.127653235] / 2.215446731

= $31,658.00 / 2.215446731

= $14,289.67 per year

“Hence, the principal plus interest portion of his mortgage payment will be $14,289.67 per year”