Question

Susan Carver will purchase a home for ​$190000. She will use a down payment of ​18% and finance the remaining portion at ​4.2%, compounded monthly for 30 years

Answer 1

$548053.69

Explanation:

Cost of home = $190000

Down payment = 18%

Loan amount = (1 - 0.18) * 190000 = $155800

Rate, r = 4.2% = 0.042 ; compounded monthly for 30 years

Using the relation :

A = P(1 + r/n)^nt

n = number of compounding times per period = 12

A = 155800(1 + 0.042/12)^(12 * 30)

A = 155800(1.0035)^360

A = 155800 * 3.5176745

A = 548053.69

Final loan amount = $548053.69