Question

Suppose you finance a home in the amount of $425,000 at 4.3% compounded monthly for 30 years. Calculate your payment.

Answer 1

Answer: $1,540,194.30 .

Step-by-step explanation:

The formula to calculate the accumulated amount earned on principal (P) at rate of interest (r)[ in decimal] compounded monthly after t years :

$A=P(1+\dfrac{r}{12})^{12t}$

Given:  P= $425,000

r= 4.3% = 0.043

t= 30 years

$A=425000(1+\dfrac{0.043}{12})^{12(30)}\\\\=425000(1.003583)^{360}\\\\=425000\times3.62398657958\approx1540194.30$

Hence, the payment would be $1,540,194.30 .