Question

You take out a 360-month fixed-rate mortgage for $600,000 with a monthly interest rate of 1%.

What is the monthly payment?

Answer 1

The monthly payment on a $600,000 fixed-rate mortgage with a 1% monthly interest rate is approximately $5,995.51.

Step-by-step explanation:

To calculate the monthly payment on a fixed-rate mortgage, you can use the formula:
P = (r * PV) / (1 - (1 + r)^(-n))
Where:
P = monthly payment
r = monthly interest rate
PV = loan amount
n = number of payments

For this example, the monthly interest rate is 1% (0.01), the loan amount is $600,000, and the number of payments is 360. Plugging these values into the formula, we get:
P = (0.01 * 600,000) / (1 - (1 + 0.01)^(-360))

Simplifying the equation, we find that the monthly payment is approximately $5,995.51.