Question

Dominic takes out a 15-year mortgage of 240000 dollars at a normal rate of interest of 6.72 percent convertible monthly. Calculate the monthly payments on the loan.

Answer 1

Dominic's monthly mortgage payment on a 15-year, $240,000 loan with a 6.72% annual interest rate, compounded monthly, is approximately $1,950.22.

Step-by-step explanation:

To calculate the monthly payments on a 15-year mortgage, we need to use the formula for the present value of an ordinary annuity:

R = P [ i(1+i)^n ] / [ (1+i)^n - 1 ]

Where R is the monthly payment,

P is the principal amount of the loan,

i is the monthly interest rate, and

n is the total number of monthly payments.

In this case, P = $240,000,

i = 6.72% / 100

= 0.0672 / 12

= 0.0056, and

n = 15 * 12

= 180.

Plugging in these values, we get:

R = 240000 [ 0.0056(1+0.0056)^180 ] / [ (1+0.0056)^180 - 1 ]

Calculating this expression will give us the monthly payments on the loan.

=1,950.22

So, the monthly mortgage payment for Dominic's 15-year mortgage of $240,000 at an annual interest rate of 6.72 percent, compounded monthly, is approximately $1,950.22.