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Alina [70]
3 years ago
6

Kingston Development Corp. purchased a piece of property for $2.79 million. The firm paid a down payment of 15 percent in cash a

nd financed the balance. The loan terms require monthly payments for 15 years at an annual percentage rate of 7.75 percent, compounded monthly. What is the amount of each mortgage payment
Business
1 answer:
Blababa [14]3 years ago
4 0

ANSWER

= $22,390.33

EXPLANATION

<em>Amount of each mortgage =loan Balance /annuity factor</em>

<em>Loan balance</em>

=( 100-15)% × $2.79 million.

=2.3715million.

<em>Annuity factor</em>

Monthly interest rate =7.75%/12 =0.65%

Number of months = 15× 12 = 180 months

<em>Annuity factor </em>

= (1- (1.0065)^(-180)/0.0065

=105.9162693

<em>Monthly mortgage payment</em>

=$2.3715 million/ 105.9162693

= $22,390.33

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