Question

I’ve inputted the info into the formula about a million times. I don’t know what I’m doing wrong

Answer 1

A monthly payment of approximately $864.67 when rounded to the nearest cent.

To find the monthly payment for a loan, you can use the formula for calculating a fixed-rate mortgage payment.

Given:

Loan amount = $256,000 (70% of the condominium price after a 30% down payment)

Interest rate = 4.05% per year

Loan term = 30 years

First, calculate the loan amount:

Down payment = 30% of $256,000

Down payment = 0.30 * $256,000

Down payment = $76,800

Loan amount = Total price of condominium - Down payment

Loan amount = $256,000 - $76,800

Loan amount = $179,200

Now, calculate the monthly payment using the formula for a fixed-rate mortgage:

`P = (r * PV)/(1- (1+r)^(-1))`

Where:

P = Monthly payment

r = Monthly interest rate (annual rate divided by 12 months and by 100 to convert to a decimal)

PV = Present value of the loan

n = Total number of payments (loan term in years multiplied by 12 months)

Convert the annual interest rate to a monthly rate:

`r = (4.05)/(12 *100)`

r= 0.0405 \12

r= 0.003375

Total number of payments:

n = 30 × 12

n= 360

Now, plug the values into the formula:

`P = (0.003375 * 179200)/(1- (1+0.003375)^(-360))`

This calculation yields a monthly payment of approximately $864.67 when rounded to the nearest cent.