Question

Suppose that 10 years ago you bought a home for $160,000, paying 10% as a down payment, and financing the rest at 9% interest for 30 years. What is your current monthly payment on your existing mortgage?

Answer 1

Current monthly payment on their existing mortgage would be $1158.66

Explanation:

Total cash value = $160,000

Down payment = 10% of 160,000

Down Payment = $16,000

Balance amount = 160,000 - 16,000 = $144,000

Monthly payment formula:

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

where,

PV is present value of home, PV=$144,000

r is rate per period ,
`r=(9)/(1200)=0.0075`

n is number of period, n=30x12 = 360

`P=(0.0075* 144000)/(1-(1+0.0075)^(-360))`

`P=\$ 1158.66`

Monthly payment would be same for 30 years.

Thus, Current monthly payment on their existing mortgage would be $1158.66