Question

A 30-year, $115,000 mortgage has a nominal annual rate of 7 percent. All payments are made at the end of each month. What is the monthly payment on the mortgage?

Answer 1

Please use the Formula to find the monthly payment=Mortgage amount*month[ly interest rate*(1+monthly interest rate)^n/[((1+monthly interest rate)^n)-1]

mortgage amount=115000

monthly interest rate=7%/12=0.58333%

n=total number of months=12*30=360

Monthly repayment=115000*0.58333%*(1+0.58333%)^360/[((1+0.58333%)^360)-1]

=670.833*8.116497/7.116497

=$765.10

We can find this answer using PMT function in EXCEL

=PMT(rate,nper,pv,fv,type)

=PMT(0.58333%,360,-115000,0,0)=$765.10