Question

Suppose you are buying your first home for $100,000, and you have $15,000 for your down...

Suppose you are buying your first home for $100,000, and you have $15,000 for your down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at a 6.5% nominal interest rate, with the first payment due in one month. What will your monthly payments be?

Select the correct answer.

a. $535.76
b. $540.26
c. $534.26
d. $537.26
e. $538.76
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Homework Answers

Answer #1

Information provided:

Price of the home= $100,000

Amount available to make down payment= $15,000

Amount of loan to purchase the house= $100,000 - $15,000= 85,000

Time= 30 years*12= 360 months

Interest rate= 6.5%/12= 0.5417% per month

The monthly payment is calculated by entering the below in a financial calculator:

PV= -85,000

N= 360

I/Y= 0.5417

Press the CPT key and PMT to compute the monthly payment.

The value obtained is $537.26.

Therefore, the amount of monthly payment is $537.26 and the answer is option d.

In case of any queries, kindly comment on the solution.

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