If the purchase price for a house is $218,500, what is the monthly payment if you put 3.5% down for a 30 year loan with a fixed
rate of 6.5%? a. $1,332.73 b. $1,378.19 c. $1,247.54 d. $646.40
2 answers:
218,500 - (3.5% down payment) =
210,852.50
30 years = 360 months
rate 6.5%
Use the loan payment formula (REALLY complex - see attached).
rate = 6.5/1,200 = <span> <span> <span> 0.005416667 </span> </span> </span>
monthly payment = (rate + [rate / (((1 + rate)^months) -1)] * principal
monthly payment = (<span>0.005416667 + [</span><span>0.005416667 / (((1</span><span>.005416667)^360)-1)] * principal
</span>monthly payment = (0.005416667 + [0.005416667 / (((1.005416667)^360)-1)] * principal
monthly payment = <span>0.005416667 + [</span><span>(0.005416667 / 6.9917988084 -1)] * </span> <span> <span> <span> 210,852.50 </span> </span> </span>
monthly payment = 0.005416667 + [(0.005416667 / 5.9917988084)] * <span> <span> 210,852.50 </span> </span>
monthly payment = 0.005416667 + [(0.005416667 / 5.9917988084)] * <span> 210,852.50 </span>
<span>monthly payment = (0.005416667 + 0.0009040135) * </span><span>210,852.50
</span>monthly payment = <span> <span> <span> 0.0063206805 </span> </span> </span> * <span>210,852.50
</span>monthly payment = <span> <span> <span> 1,332.73</span></span></span>
Answer is a.
Calculator to check your answers:
http://www.1728.org/calcloan.htm
210,852.50
30 years = 360 months
rate 6.5%
Use the loan payment formula (REALLY complex - see attached).
rate = 6.5/1,200 = <span> <span> <span> 0.005416667 </span> </span> </span>
monthly payment = (rate + [rate / (((1 + rate)^months) -1)] * principal
monthly payment = (<span>0.005416667 + [</span><span>0.005416667 / (((1</span><span>.005416667)^360)-1)] * principal
</span>monthly payment = (0.005416667 + [0.005416667 / (((1.005416667)^360)-1)] * principal
monthly payment = <span>0.005416667 + [</span><span>(0.005416667 / 6.9917988084 -1)] * </span> <span> <span> <span> 210,852.50 </span> </span> </span>
monthly payment = 0.005416667 + [(0.005416667 / 5.9917988084)] * <span> <span> 210,852.50 </span> </span>
monthly payment = 0.005416667 + [(0.005416667 / 5.9917988084)] * <span> 210,852.50 </span>
<span>monthly payment = (0.005416667 + 0.0009040135) * </span><span>210,852.50
</span>monthly payment = <span> <span> <span> 0.0063206805 </span> </span> </span> * <span>210,852.50
</span>monthly payment = <span> <span> <span> 1,332.73</span></span></span>
Answer is a.
Calculator to check your answers:
http://www.1728.org/calcloan.htm
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