Question

7) You put 20% down on a home with a purchase price of $250,000. The down payment is thus $50,000, leaving a balance owed of $200,000. The bank will loan the remaining balance at 3.91% APR. You will make annual payments with a 30-year payment schedule. What is the annual annuity payment under this schedule?

Answer 1

=$11,439.96(Approx)

Step-by-step explanation:

Consider the following calculations

Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

200,000=Annuity[1-(1.0391)^-30]/0.0391

200,000=Annuity*17.48257135

Annuity=200,000/17.48257135

=$11,439.96(Approx)