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Your real estate agent mentions that homes in your price range require a payment of $2150...

Your real estate agent mentions that homes in your price range require a payment of $2150 per qaurter for 29 years at 1.6% interest per quarter. What is the size of the mortgage with these terms?

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Answer #1

Information provided:

Quarterly payment= $2,150

Time= 29 years*4 = 116 quarters

Quarterly interest rate= 1.6%/4 = 0.40%

The question is solved by computing the present value.

The present value is calculated by entering the below in a financial calculator:

PMT= -2,150

N= 116

I/Y= 0.40

Press the CPT key and PMT to compute the present value.

The value obtained is 199,226.65.

Therefore, the size of the mortgage is $199,226.65.

In case of any query, kindly comment on the solution.

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