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21 votes
21 votes
Zack took out a 30-year mortgage for $70,000 at 9%. How much is his monthly mortgage payment? please explanation.. I assume $630,000

User Sarena
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1 Answer

6 votes
6 votes

Answer:

$563.24

Explanation:

The monthly payment on a mortgage loan is found using the amortization formula:

A = P(r/12)/(1 -(1 +r/12)^(-12t))

where A is the monthly payment on a loan of P at interest rate r for t years.

Filling in the given values, we find the payment to be ...

A = $70,000×(0.09/12)/(1 -(1 +0.09/12)^(-12·30)) ≈ $563.236

The monthly payment is about $563.24.

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Additional comment

Many graphing calculators and all spreadsheets have functions that will do this calculation for you.

User Kimball Robinson
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