Question

You want to buy a $232,000 home. You plan to pay 15% as a down payment, and take out a 30 year loan for the rest.b) What will your monthly payments be if the interest rate is 6%?

Answer 1

To calculate the monthly payment on a $232,000 home loan, subtract the down payment from the home price to get the loan amount. Then, use the loan amount, interest rate, and loan term to calculate the monthly payments using the PMT formula.

Step-by-step explanation:

To calculate the monthly payments on a $232,000 home loan with a 15% down payment, first calculate the loan amount by multiplying the home price by 85% (100% - 15%). In this case, the loan amount is $197,200. Then, use the loan amount, interest rate, and loan term to calculate the monthly payments using the formula:

PMT = P*r / (1 - (1+r)^(-n))

Where:

PMT is the monthly payment

P is the loan amount

r is the monthly interest rate (6% divided by 12)

n is the number of months (30 years multiplied by 12)

Plugging in the values:

P = $197,200

r = 0.06/12

n = 30 * 12

Calculating PMT, the monthly payment, using this formula gives $1,180.70.

Answer 2

Step-by-step explanation:

Given;

We are told that a mortgage loan of $232,000 with a 15% down payment has been taken. The loan tenure is 30 years. That means the initial payment based on a 15% of 232,000 will be $34,800.

Therefore, the following details;

`\begin{gathered} Principal\text{ }amount=197200 \\ Rate=(6)/(12)=0.5\% \\ Period=30 \end{gathered}`

Required;

We are required to calculate the monthly repayment amount if the loan repayment will be done monthly.

Step-by-step solution;

Note that the rate of interest is 6% per annum. However, since the repayment will be done monthly (that is 12 times each year), then the rate has been adjusted to (6/12)% as shown above.

Therefore using an online calculator, your input(s) will be;

`\begin{gathered} Principal\text{ }amount=232000 \\ Down\text{ }payment=34800 \\ Rate=0.5 \\ Period\text{ }or\text{ }loan\text{ }term=30 \end{gathered}`

With an online calculator, the monthly amount due would be;

`Monthly\text{ }repayment=590`

ANSWER:

If the interest rate is 6%, then the monthly repayment would be $590