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leonid [27]
4 years ago
9

If Joey purchased a $100,000 house with a 20 percent down payment and borrowed the rest on a 30-year mortgage at 4 1/2% interest

, what would his monthly payment be?
Business
2 answers:
levacccp [35]4 years ago
8 0

Answer:

Monthly payment would be $ 405.35

Explanation:

Given,

The price of the house = $ 100,000,

Down payment percentage = 20%,

So, the amount of down payment = 20% of price of the house

= 20% of $ 100,000

=\frac{20\times 100000}{100}

= $ 20000,

Thus, the present value of the loan, PV = price of the house - down payment

= $ 100,000 - $ 20000

= $ 80,000

Number of years = 30,

∴ Number of months, n = 30 × 12 = 360,

Annual rate = 4\frac{1}{2}\% = 4.5% = 0.045,

∴ monthly rate, r = \frac{0.045}{12}

Therefore, the monthly payment of the loan,

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

=\frac{80000(\frac{0.045}{12})}{1-(1+\frac{0.045}{12})^{-360}}

≈ $ 405.35   ( using calculator )

nasty-shy [4]4 years ago
5 0

$405

A 20% down payment on a $100,000 house is $20,000. Therefore the loan amount is  $80,000 at 4.5% interest.

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