Question

Marissa is purchasing a home for $169,000. Her loan has been approved for a 30 year fixed-rate loan at 5 percent annual interest. Marissa will pay 20 percent of the purchase price as a down payment. What will her monthly payment be?

Answer 1

Round answer up to $726.02, the closest answer to the actual number.

Explanation:

Answer 2

her monthly payment = $725.78

Explanation:

The cost of Marissa's Home = $169,000.

Down-payment = 20% of the cost = 0.2 x 169000 = $33,800.

Loan Present Value, PV = $169000 - $33800 = $135,200.

Interest rate, R = 5%/12 = 1/240 = 0.004167

Tenure, N = 30 years = 30 x 12 = 360 months.

`Pmt = (PV*R)/([1-(1+R)^(-N) ]) \\\\Pmt = (135,200*0.004167)/([1-(1+0.004167)^(-360) ]) \\\\Pmt = \$725.78`

Hence, her monthly payment = $725.78