Jimmy buys a house for $232,000. He makes a down payment of $20,000 and finances the balance. How much are his monthly payments if the current interest rate is 6.1% and it is a fifteen year loan?
| Cost of house | $ 2,32,000 | ||||||||||||
| Less down payment | $ 20,000 | ||||||||||||
| Loan amount | a | $ 2,12,000 | |||||||||||
| Present value of annuity of 1 | b | 117.75133 | |||||||||||
| Monthly Payment | a/b | $ 1,800.40 | |||||||||||
| Working: | |||||||||||||
| Present Value of annuity of 1 | = | (1-(1+i)^-n)/i | Where, | ||||||||||
| = | (1-(1+0.005083)^-180)/0.005083 | i | 6.1%/12 | = | 0.005083 | ||||||||
| = | 117.75133 | n | 15*12 | = | 180 | ||||||||
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