Question

Investor b decided to purchase a home that is valued at $300,000 with a loan of 80% ltv (loan-to-value), 6.00% annually fixed rate for a 30 years term, and one payment per month. What is the monthly payment for this mortgage? Round to the nearest cent.

Answer 1

To calculate the monthly mortgage payment for an 80% LTV loan on a $300,000 home at a 6.00% annual fixed rate over 30 years, the formula for a fixed-rate mortgage is applied, resulting in a monthly payment of $1,438.92.

Step-by-step explanation:

The question involves calculating the monthly mortgage payment for an 80% loan-to-value loan on a $300,000 house at a 6.00% annual fixed interest rate over a 30-year term with one payment per month. To find the monthly payment, we can use the formula for a fixed-rate mortgage which is:

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

where:

M is the total monthly mortgage payment

P is the principal loan amount

i is the monthly interest rate (annual rate divided by 12)

n is the number of payments (loan term in years multiplied by 12)

In this case:

P = 80% of $300,000 = $240,000

i = 6.00% annual rate / 12 = 0.005

n = 30 years * 12 months/year = 360 months

Plugging the numbers into the formula, we calculate the monthly payment to be $1,438.92, rounded to the nearest cent.