Question

Marie is purchasing a $105,000 home with a 30 year mortgage at 5.25%. What’s her monthly principal and interest payment?

A. $414.73
B. $503.23
C. $556.09
D. $579.81

Answer 1

Answer: $579.81 APEX

Answer 2

Her monthly principal payment is D: $579.81 and monthly interest payment is 0.4375.

Explanation:

Ok, in order to calculate the monthly principal and interest payment, we can use this relatively simple equation. The equation is:

`M=P(r(1+r)^(n) )/(((1+r)^(n)-1) )`

Where variables represent the following:

M is your monthly payment.

P is your principal.

r is your monthly interest rate, calculated by dividing your annual interest rate by 12.

n is your number of payments (the number of months you will be paying the loan throughout the 30 years)

Then, in this case:

M=?

P=$105,000

5.25%=5.25/100=0.0525, then
`r=(0.0525)/(12) =0.004375`

`n=12*30=360`

So,
`M=105,000(0.004375(1+(0.004375))^(360) )/(((1+(0.004375))^(360)-1))` $

Solving this,

`M=105,000(0.004375(1.004375))^(360) )/(((1.004375))^(360)-1))` $

`M=105,000(0.004375(4.8141) )/(((4.8141))-1))` $

`M=105,000(0.02106 )/(3.8142)` $

`M=105,000(0.005522)/tex] $</p><p>[tex]M=579.81` $

Her monthly principal payment is $579.81.