Question

You want to buy a house that costs $255,000. You will make a down payment equal...

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?

Homework Answers

Answer #1

Let me know if you need any clarification..

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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