Question

A couple has just purchased a home for $348,400.00. They will pay 20% down in cash,...

A couple has just purchased a home for $348,400.00. They will pay 20% down in cash, and finance the remaining balance. The mortgage broker has gotten them a mortgage rate of 5.04% APR with monthly compounding. The mortgage has a term of 30 years. What is the monthly payment on the loan?

Homework Answers

Answer #1

$1,503.05

Working:

Monthly Payment = Loan Amount/cumulative disocount factor
= $ 2,78,720.00 / 185.43624
= $       1,503.05
Working:
Loan Amount = $ 3,48,400.00 x (1-0.20) = $ 2,78,720.00
Cumulative discount factor = (1-(1+i)^-n)/i Where,
= (1-(1+0.0042)^-360)/0.0042 i 5.04%/12 = 0.0042
=        185.43624 n 30*12 = 360
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