Question

Can someone please help me solve this problem????

Weston is buying a house for $215,000. He is financing $185,000 and obtained a 30-year, fixed-rate mortgage with a 6.525% interest rate. How much are his monthly payments?

$1,005.94

$1,362.48

$1,614.09

$1,172.37,

Answer 1

$1,172.37 The formula for calculating the payment on a loan is P = r(PV)/(1 - (1 + r)^(-n)) where P = Payment PV = Present value r = interest per period n = number of periods Since there's 12 months per year and the loan is for 30 years, there will be 12 * 30 = 360 periods. The interest rate per month will be 0.06525 / 12 = 0.0054375, and finally, the present value is the size of the loan at 185000. Now let's substitute and solve. P = r(PV)/(1 - (1 + r)^(-n)) P = 0.0054375(185000)/(1 - (1 + 0.0054375)^(-360)) P = 1005.9375/(1 - (1.0054375)^(-360)) P = 1005.9375/(1 - 0.141961802) P = 1005.9375/0.858038198 P = 1172.369134 P = 1172.37 So the monthly interest and principle payments are $1,172.37 Note: The actual payments will be higher since the above figure doesn't include insurance and taxes.

Answer 2

For this problem, we will be using the formula for loan:

PMT=P[(r/n)/1-(1+r/n)^-ny]
where:
P=Principal Value
r=rate
n=number of compoundings/year
y=year

To solve:
*Weston is only financing $185,000.

P=$185,000
r=6.525% or 0.06525
n=12 (monthly)
year=30

PMT=185000[(0.06525/12)/1-(1+0.6525/12)^-12*30
= 185000[(.0054375)/1-(1+.0054375)^-360
= 185000[(.0054375)/1-(1.0054375)^-360
= 185000[(.0054375)/1-(0.142)
= 185000[(.0054375)/(.858)
= 185000(0.00634)
= 1,172.37

Answer: $1,172.37