Question

You are borrowing $245,000 to purchase a home. The loan agreement requires a monthly payment based...

You are borrowing $245,000 to purchase a home. The loan agreement requires a monthly payment based upon a 4.5% quoted APR over 20 years. What is your monthly mortgage payment?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Given the following information,

Loan amount = P = 245,000

Term in years = 20

Total number of monthly payments (mt) = 20*12 = 240

Annual Percentage Rate = APR = 4.5% = 0.045

Monthly interest rate (r/m) = 0.045/ 12 = 0.00375

Calculation of monthly payments, using the following formula,

Monthly Payments = (P*(r/m))/ (1-(1+(r/m))^(-mt)))

Substituting the above given values, we get

Monthly Payments = (245000*(0.00375))/ (1-(1+(0.00375))^(-240)))

Monthly Payments = (245000*(0.00375))/ (1-(1.00375)^(-240))

Monthly Payments = 918.75/ (1-(1.00375)^(-240))

Monthly Payments = 918.75/ (1-0.4073)

Monthly Payments = 918.75/ 0.5927

Monthly Payments = 1549.99

Therefore, the monthly mortgage payment is $1549.99

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You are borrowing $200,000 on a 30 year, 12% apr, monthly payment, mortgage loan. How much...
You are borrowing $200,000 on a 30 year, 12% apr, monthly payment, mortgage loan. How much will be your principal repayment from your monthly mortgage payment at the end of the second month?(Make a table for the mortgage loan payment schedule) Can you explain how to get interest and principle repaid please
Using the Mortgage Payment Formula, calculate a monthly mortgage payment for a home with the price...
Using the Mortgage Payment Formula, calculate a monthly mortgage payment for a home with the price of $405,000 using pencil and paper. Your down payment is 10% of your own money apart from the loan. Calculate the total paid for your home after paying the monthly payment for 15 years factoring in the rate of 2.500% and APR of 2.556%. You can use arithmetic. How much money will you pay in interest over 15 years? All Calculations must be shown.
You hope to be able to purchase a home within 1-3 years after graduation. You expect...
You hope to be able to purchase a home within 1-3 years after graduation. You expect to have to save for the necessary down payment and closing costs without relying on financial help from your family or relatives. Your financial goal is to purchase a home in the $300,000 price range and have the available cash for the down payment and required closing costs for the type of mortgage financing that you select and are able to receive home mortgage...
You have obtained a loan of $250,000 to purchase a home. What are the monthly payments...
You have obtained a loan of $250,000 to purchase a home. What are the monthly payments if the APR is 3.75% for 30 years (payments will be made monthly for the next 30 years)
You want to buy a $245,000 home. You plan to pay 10% as a down payment,...
You want to buy a $245,000 home. You plan to pay 10% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? $ b) What will your monthly payments be if the interest rate is 5%? $ c) What will your monthly payments be if the interest rate is 6%? $
Suppose you finance a home purchase with a loan for $365,000 at an APR of 3.75%...
Suppose you finance a home purchase with a loan for $365,000 at an APR of 3.75% for 30 years. A. What will your monthly payments be? Round your answer to two decimal places. B. How much total interest will you pay over the life of this loan? C.Complete the first 5 month of an amortization table for this loan. Include payment number, payment amount, amount applied to interest, amount applied to principle, balance, and equity as columns in your table.
Using the Mortgage Payment Formula, calculate a monthly mortgage payment for a home with the price...
Using the Mortgage Payment Formula, calculate a monthly mortgage payment for a home with the price of $405,000 using pencil and paper. Your down payment is 10% of your own money apart from the loan. Calculate the total paid for your home after paying the monthly payment for 30 years factoring in the rate of 2.990%. You can use arithmetic. How much money will you pay in interest over 30 years? All Calculations must be shown.
You borrow $210,000 to purchase a home. The terms of the loan call for monthly payments...
You borrow $210,000 to purchase a home. The terms of the loan call for monthly payments over 30 years at a mortgage rate of 4.50 percent. What percentage of your first 36 months' total payments go toward interest? A. 81 percent B. 72 percent C. 65 percent D. 59 percent
You have been saving money to buy a home and today, you decided to buy a...
You have been saving money to buy a home and today, you decided to buy a home and take out $350,000 mortgage loan from a bank. This loan requires you to make a monthly payment for 30 years and the interest rate on your loan is 4% APR compounded monthly. What is your monthly mortgage payment for this loan? Please show your excel formula in your answer and explain step-by-step calculation to arrive to your answer.
You borrow $210,000 to purchase a home. The terms of the loan call for monthly payments...
You borrow $210,000 to purchase a home. The terms of the loan call for monthly payments over 30 years at a mortgage rate of 4.50 percent. What percentage of your first 24 months' total payments go toward interest? Group of answer choices a) 59 percent b) 71 percent c) 73 percent d) 77 percent
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT