Question

If the purchase price for a house is $309,900, what is the monthly payment if you put 20% down for a 30 year loan with a fixed rate of 6%?

Answer 1

$1,486.41

Explanation:

Purchase price for a house is $309,900 and you put 20% down for a 30 year loan with a fixed rate of 6%.

The amount made by down payment is,

`=309,900* (20)/(100)=\$61,980`

The amount left for monthly payment is,

`=309,900-61,980=\$247,920`

We know that,

`\text{PV of annuity}=P\left[(1-(1+r)^(-n))/(r)\right]`

Here,

PV = Present Value = $247,920,

P = Monthly payment,

r = Monthly rate of interest =
`(0.06)/(12)`

n = number of months = 30 years = 360 months

Putting the values,

`\Rightarrow 247920=P\left[(1-(1+(0.06)/(12))^(-360))/((0.06)/(12))\right]`

`\Rightarrow P=(247920)/(\left[(1-(1+(0.06)/(12))^(-360))/((0.06)/(12))\right])`

`\Rightarrow P=\$1,486.41`

Answer 2

If the purchase price for a house is $309,900, and you put 20% down for a 30 year loan with a fixed rate of 6%, the monthly payment is $1486.41.