Listed price = $1.4 million Down payment = 20% of $1.4 million = 0.2 x 1,400,000 = 280,000 Amount left to pay = $1.4 million - 280,000 = $1,120,000 Present value of an annuity is given by PV = P(1 - (1 + r/t)^-nt) / r where: PV = $1,120,000 r = 5% = 0.05 t = 12 n = 30 years. 1,120,000 = P(1 - (1 + 0.05/12)^-(12 x 30)) / 0.05 1,120,000 x 0.05 = P(1 - (1 + 1/240)^-360) 56,000 = P(1 - 0.2238) P = 56,000 / 0.7761 = 72,148.83 Therefore, the monthly payment is $72,148.83
