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2. The Savoias bought an investment property valued at $160 000.00 by paying 25% down and...

2. The Savoias bought an investment property valued at $160 000.00 by paying 25% down and mortgaging the balance over 25 years through equal monthly payments at 6% compounded monthly. What was the size of the monthly payments?

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Answer #1

Savoias bought an investment property valued at $160000

Downpayment paid on the spot = $160000 * 25/100 = $40000

Remaning amount left after deducting downpayment = $160000 - $40000 = $120000

Calculating the amount of monthly Installment = 120000 (1 + 0.06/12)^25*12

= 120000 ( 1.005)^300

= 120000 (4.464)

= $535680

Monthly Installment = 535680 / 300 = $1785.6

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