Question

you want to buy a house that costs $255,000. you will make a down payment equal to 20 percent of the price of the house and finance the remainder with a loan that has an apr of 5.37 percent compounded monthly. if the loan is for 30 years, what are your monthly mortgage payments?

Answer 1

A monthly mortgage payment is the amount of money that a borrower is required to pay to a lender each month in order to repay a home loan. This payment typically includes both the principal and interest on the loan, as well as any property taxes and insurance that are included in the loan.

Step-by-step explanation:

To calculate the monthly mortgage payment, you would need to use the formula for a fixed-rate mortgage. The formula is:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

where:

M = monthly mortgage payment

P = the principal, or the total amount of the loan

i = the monthly interest rate (5.37% APR divided by 12 months)

n = the number of payments (30 years x 12 months)

Plugging in the numbers, we get:

M = (255,000 - (255,000 * 0.2)) [ (5.37 / 100 / 12) (1 + (5.37 / 100 / 12))^(30 x 12) ] / [ (1 + (5.37 / 100 / 12))^(30 x 12) – 1]

M = 1463.03