Suppose you are buying a house and have taken out a mortgage for $250,000. The mortgage is a 30 year fixed rate mortgage with an APR of 5.25%. What is your monthly mortgage payment?
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3 | Calculation of monthly payment: | |||||||
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5 | Monthly payment can be calculated using PMT(RATE,NPER,PV,FV,TYPE) function in Excel as follows: | |||||||
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7 | Given the following data: | |||||||
8 | Loan Amount | $250,000 | ||||||
9 | Duration of mortgage | 30 | Years | |||||
10 | Interest rate | 5.25% | ||||||
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12 | Monthly Payment can be calculated as below: | |||||||
13 | RATE (Monthly interest rate): | 0.44% | =D10/12 | |||||
14 | NPER (No of Months): | 360 | =D9*12 | |||||
15 | PV (Loan Amount): | -$250,000 | =-D8 | |||||
16 | FV | 0 | ||||||
17 | TYPE | 0 | ||||||
18 | Monthly Payment | $1,380.51 | =PMT(D13,D14,D15,D16,D17) | |||||
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20 | Hence Monthly Mortgage Payment is | $1,380.51 | ||||||
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