Question

Work out how much the repainmt of a £350000 Mortgage with a 10% deposit would be over twenty-five years at an interest rate of 4.5%?

Answer 1

£1,945.41

Step-by-step explanation:

we can use the present value of an annuity formula to solve this question:

present value of an annuity = monthly payment x present value annuity factor

monthly payment = present value of an annuity / present value annuity factor

• present value of an annuity = 350,000
• present value annuity factor, 0.375% (4.5%/12), 300 periods (25 x 12) = 179.9107

monthly payment = 350,000 / 179.9107 = 1,945.41