Question

Suppose that 10 years ago you bought a home for $110,000, paying 10% as a down payment, and financing the rest at 8% interest for 30 years.

Your existing mortgage (the one you got 10 years ago)

How much money did you pay as your down payment?

$Correct
11,000
Correct Question 2. Points: 1 out of 1 possible.
How much money was your existing mortgage (loan) for?

$Correct
99,000


What is your current monthly payment on your existing mortgage?




Note: Carry at least 4 decimal places during calculations, but round your final answer to the nearest cent.

Answer 1

Answer: Using the loan formula:

Loan = P * (r * (1 + r)^n) / ((1 + r)^n - 1)

where P is the principal (loan amount), r is the monthly interest rate, and n is the total number of payments (30 years * 12 months/year = 360)

We can calculate the monthly payment as:

Loan = 99,000

r = 0.08/12 = 0.0066667

n = 360

Monthly payment = 99,000 * (0.0066667 * (1 + 0.0066667)^360) / ((1 + 0.0066667)^360 - 1)

Monthly payment = $724.96 (rounded to the nearest cent)

Explanation: