Question

You want to buy a house and will need to borrow $295,000. The interest rate on your loan is 6.37 percent compounded monthly and the loan is for 30 years. What are your monthly mortgage payments?

Answer 1

Answer:

$1,839.45

Explanation:

PV =  P * [1-(1+r)^-n / r]

n = 30*12=360 months, r = 6.37%/12 = 0.5308% (monthly)

295,000 = P*[1 - (1+0.005308)^-360 / 0.005308}

295,000 = P * $160.3739

P = $295,000 / $160.3739

P = $1,839.45

So, the monthly mortgage payments is $1,839.45.