Question

the effective interest rate on a mortgage is 9.38%. What is the mothly payment if the original mortage amount is $200,000

Answer 1

Answer:

mothly payment = $20126.57

Explanation:

given  data

effective interest rate r = 9.38 % = 0.0938

mortage amount P  = $200,000

solution

we consider here time period is t = 30 year

so mothly payment formula is

mothly payment = P × r × $\frac{(1+r)^t}{(1+r)^t - 1}$      .............1

put here value and we get

mothly payment = 200000 × 0.0938 × $\frac{(1+0.0938)^{30}}{(1+0.0938)^{30} - 1}$

mothly payment = $20126.57