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Suppose a house costs K300,000 and the initial payment is K50,000 with a 30 year loan...

Suppose a house costs K300,000 and the initial payment is K50,000 with a 30 year loan and monthly interest rate of 0.5%. What is the appropriate monthly mortgage payment

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Answer #1

- Loan Amount = Price of house - Initial payment(or Downpayment)

Loan Amount = K300,000 - K50,000

Loan Amount = $250,000

Calculating the Monthly Mortgage Payments:-

Where, P = Loan amount = $250,000

r = Periodic Interest rate = 0.5%

n= no of periods = 30 years*12 = 360

Monthly Mortgage Payment = $1498.88

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