Final answer:
The monthly payment for the Riaz family's home loan of $120,000 with a 5% annual interest rate over a 15-year period will be approximately $975.84.
Step-by-step explanation:
To calculate the monthly payment for the Riaz family's home loan, we will use the formula for calculating mortgage payments:
Monthly Payment = P * r * (1 + r)^n / ((1 + r)^n - 1)
Where:
- P = loan amount = $120,000
- r = monthly interest rate = annual interest rate / 12 = 5% / 12 = 0.4167%
- n = number of monthly payments = 15 years * 12 months/year = 180 months
Plugging the values into the formula:
Monthly Payment = $120,000 * 0.4167% * (1 + 0.4167%)^180 / ((1 + 0.4167%)^180 - 1)
Using a calculator or spreadsheet, we find that the monthly payment for the Riaz family's home loan will be approximately $975.84.