Question

you buy a building for 250,000 and the terms reqiure a 20% downpayment. if the 200,000 balance is to be paid off over 30 yeats at a 12% interest on the unpaid balance, what are the 30 equal payments? a) 49,658 b) 31,036 c) 24,829 d) 20,593

Answer 1

Correct option is > c) 24,829

Working:

Using financial calculator BA II Plus - Input details:	#
I/Y = R = Rate =	12.000000
FV = Future value =	$0
N = Total payment term = 30 Years =	30
PV = Present value of loan =	-$200,000
CPT > PMT = Monthly Payment =	$24,829
Alternate formula-based method:
PMT = Payment = |PV| x R% x (1+R%)^N / ((1+R%)^N - 1)	$24,829