Question

you buy a building for $300,000 and the terms require a 20% downpayment. If the $240,000 balance is to be paid off over 30 years at a 16% rate of interest on the unpaid balance, what are the 30 equal payments? $24,829 $17,436 $30,460 $38,853

Answer 1

Correct option is > $38,853

Using financial calculator BA II Plus - Input details:	#
I/Y = Rate =	16.000000
FV = Future value =	$0
N = Total payment term = 30 Years =	30
PV = Present value of loan =	-$240,000
CPT > PMT = Monthly Payment =	$38,853
Alternate Method:
PMT = Payment = |PV| x R% x (1+R%)^N / ((1+R%)^N - 1)	$38,853