Question

John bought a new house. He made a $5,500 down payment and financed the rest, $220,000, through his credit union. The credit union charged him 10% per year compounded monthly for 20 years. How much were his monthly payments?

Answer 1

Total Amount: $ 1,612,176.2 , after 1st month he is supposed to pay $221833.3, after 2nd month his amount becomes $223681.94

Step-by-step explanation:

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

P: principal

r: interest rate

n: number of compoundings

t: number of years

A= 220,000×(1+0.1/12)^(12×20)

A= $ 1,612,176.2

After 1st Month

A= P + P×r×t

A= 220000+ 220000×0.1×1/12

A= $ 221833.33

For 2nd month, P= 221833.33

A= 221833.3+221833.3×0.1×1/12

A=$ 223,681.94