Alice purchased a house using a fixed rate mortgage. The annual interest rate is 5.6% compounded monthly for 30 years. The mortg

Question

melisa1 [442]

2 years ago

13

Alice purchased a house using a fixed rate mortgage. The annual interest rate is 5.6% compounded monthly for 30 years. The mortg

age amount is $205,000. what is the monthly payment on the mortgage?

Mathematics

1 answer:

zhuklara [117] · Answer 1 · 2022-01-20T19:13:15+03:00

Hi there
The formula of the present value of annuity ordinary is
Pv=pmt [(1-(1+r/k)^(-kn))÷(r/k)]
So we need to find the monthly payment pmt
Pmt=pv÷[(1-(1+r/k)^(-kn))÷(r/k)]
Pv present value 205000
R interest rate 0.056
K compounded monthly 12
N time 30

PMT=205,000÷((1−(1+0.056÷12)^(
−12×30))÷(0.056÷12))
=1,176.86...answer

Hope it helps