Question

Troy took out an 80/20 mortgage to buy a house costing $100,000. The first (80%) mortgage has an interest rate of 4.75%, The second (20%) mortgage has an interest rate of 7.525%. Both the first mortgage and the second mortgage are 30-year fixed-rate mortgages.
What is his total mortgage payment for this house?

Answer 1

Answer:

  $557.51

Step-by-step explanation:

A financial calculator tells you the payments are ...

  on $80,000 at 4.75%: $417.32

  on $20,000 at 7.525%: $140.19

Then the total monthly payment is ...

  $417.32 +140.19 = $557.51

_____

You can use the amortization formula to find the payment (A) on principal P at interest rate r for t years to be ...

  A = P(r/12)/(1 -(1+r/12)^(-12t))

I find it takes fewer keystrokes to enter the numbers into a financial calculator. Both give the same result.