Answer: The monthly mortgage payment is $640
Explanation:
The cost of the house is $159,000
The down payment made is 20%. This means that the amount paid as down payment is
20/100 × 159000 = 31800
The balance to be paid would be
159000 - 31800 = $127200
We would apply the periodic interest rate formula which is expressed as
P = a/[{(1+r)^n]-1}/{r(1+r)^n}]
Where
P represents the monthly payments.
a represents the amount of the loan
r represents the annual rate.
n represents number of monthly payments. Therefore
a = $127200
r = 0.044/12 = 0.0037
n = 12 × 30 = 360
Therefore,
P = 127200/[{(1+0.0037)^360]-1}/{0.0037(1+0.0037)^360}]
P = 127200/[{(1.0037)^360]-1}/{0.0037(1.0037)^360}]
P = 127200/{3.779 -1}/[0.0037(3.779)]
P = 127200/(2.779/0.0139823)
P = 127200/198.75127840198
P = $640