Question

You wish to take out a $200,000 mortgage. The yearly interest rate on the loan is 4%, and the loan is for 30 years. How much will your monthly payment be? Round to the nearest cent.

Answer 1

To calculate the monthly payment on a mortgage, you can use the formula M = P * (r * (1+r)^n) / ((1+r)^n - 1), where P is the principal amount, r is the monthly interest rate, and n is the number of payments. Plugging in the values, the monthly payment on a $200,000 mortgage with a 4% interest rate over 30 years is approximately $954.83.

Step-by-step explanation:

To calculate the monthly payment on a mortgage, we can use the formula:

Monthly Payment (M) = P * (r * (1+r)^n) / ((1+r)^n - 1)

Where:

• P is the principal amount of the loan ($200,000 in this case)
• r is the monthly interest rate (0.04 / 12)
• n is the total number of payments (30 years * 12 months per year = 360)

Plugging in the values, we get:

Monthly Payment = $200,000 * (0.04 / 12 * (1+0.04 / 12)^360) / ((1+0.04 / 12)^360 - 1)