Question

Aziza is purchasing a home worth $393,124 and is financing the purchase with a 30-year, fixed rate, fully amortizing loan at 80% LTV with 2% interest. What will be Aziza's monthly payments? Round your answer to the nearest cent (e.g. if your answer is $1,000.567, enter 1000.57).

Answer 1

Aziza is purchasing a Home worth = $393,124

Loan to Value(LTV) ratio = 80%

Loan amount = LTV*Home Value = $393,124*0.8

Loan amount =$314,499.20

Calculating the monthly loan payment of fully amortizing loan of Aziza:-

Where, P = Loan amount = $314,499.20

r = Periodic Interest rate = 2%/12 = 0.16666%

n= no of periods = 30 years*12 = 360

Monthly Payment = $1,162.45

So, Aziza's monthly payments is $1,162.45

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