Question

Aziza is purchasing a home worth $334,901 and is financing the purchase with a 30-year, fixed rate, fully amortizing loan at 80% LTV with 3.4% 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

Questions ask for monthly intallment amount.

Loan Amount = 334901 x 80% = 267920.80

Frequeny of payment is monthly so you need to adjust time and rate accordingly. rate given in the question doesn't specify whether its a APR or EAR, so assuming APR as more wisely.

Rate = 3.4 / 12 = 0.283333 , Periods = 30 x 12 = 360 months

You need Excel or financial calculator to solve such longer periods questions:

Solving with texas ba 2, Put values in TVM as N=360, I/Y=0.283333, PV= 267920.80, FV = 0

Compute pmt = 1188.1785

MOnthly payment be = 1188.18 approx