Question

Suppose you are buying your first home for $145,000, and you have $15,000 for your down...

  1. Suppose you are buying your first home for $145,000, and you have $15,000 for your down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at a 6.5% nominal interest rate, with the first payment due in one month. What will your monthly payments be?

Group of answer choices

$741.57

$862.77

$821.69

$780.60

$905.91

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Homework Answers

Answer #1
Cost of Home $145,000.00
Down Payment $15,000.00
Loan $130,000.00
Interest 6.5%
Monthly Interest Rate 0.5417%
Time 30 years
Periods 360 months
To determine monthly payment, we need to determine monthly factor and then divide it with Loan amount which will give monthly payment
Monthly Factor =(1-((1+r)^-n))/r
Annuity Factor =(1-((1+0.5417%)^-360))/0.5417%
=158.21
Monthly Payment = 130000/158.21
Monthly Payment = $821.69
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