Question

Suppose that 10 years ago you bought a home for $160,000, paying 10% as a down payment, and financing the rest at 9% interest for 30 years. What is your current monthly payment on your existing mortgage?

Answer 1

Answer:

Current monthly payment on their existing mortgage would be $1158.66

Step-by-step explanation:

Total cash value = $160,000

Down payment = 10% of 160,000

Down Payment = $16,000

Balance amount = 160,000 - 16,000 = $144,000

Monthly payment formula:

$P=\dfrac{r(PV)}{1-(1+r)^{-n}}$

where,

PV is present value of home, PV=$144,000

r is rate per period , $r=\frac{9}{1200}=0.0075$

n is number of period, n=30x12 = 360

$P=\dfrac{0.0075\times 144000}{1-(1+0.0075)^{-360}}$

$P=\ 1158.66$

Monthly payment would be same for 30 years.

Thus, Current monthly payment on their existing mortgage would be $1158.66