You want to buy a house that costs $255,000. You will make a down payment equal to 20 percent of the price of the house and finance the remainder with a loan that has an interest rate of 5.37 percent compounded monthly. If the loan is for 30 years, what are your monthly mortgage payments?
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| House cost= | $255,000 | ||||
| Down payment = 255000*20% | $51,000 | ||||
| Loan amoount = 255000*80% | $204,000 | ||||
| we have to use financial calculator to solve this problem | |||||
| Put in calculator below - | |||||
| PV | -204000 | Loan amount | |||
| FV | 0 | ||||
| I | 5.37%/12 | 0.44750% | Monthly interest rate | ||
| N | =30*12 | 360 | Number of period | ||
| Compute PMT | $1,141.71 | ||||
| therefore monthly installment = | $1,141.71 | ||||
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