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

mothly payment = $20126.57

Step-by-step 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 ×
`((1+r)^t)/((1+r)^t - 1)` .............1

put here value and we get

mothly payment = 200000 × 0.0938 ×
`((1+0.0938)^(30))/((1+0.0938)^(30) - 1)`

mothly payment = $20126.57