Question

You put 20% down on a home with a purchase price of $250,000. The down payment is thus $50,000, leaving a balance owed of $200,000. The bank will loan the remaining balance at 3.91% APR. You will make annual payments with a 30-year payment schedule. What is the annual annuity payment under this schedule

Answer 1

The amount payable yearly under the mortgage is $ 11,439.96

Step-by-step explanation:

The annual annuity payment can be arrived at by using the pmt formula in excel,which is stated thus:

=pmt(rate,nper,-pv,fv)

the rate of interest on the mortgage which is 3.91%

nper is the duration of the mortgage which is 30 years

pv is the amount of loan to be repaid over 30 years, that is $200,000

fv is the sum of the principal and total interest repayable,since it is not known it is taken as zero

=pmt(3.91%,30,-200000,0)

pmt=$ 11,439.96

The annual annuity payment under the schedule is $ 11,439.96