Question

Suppose you finance a home in the amount of $425,000 at 4.3% compounded monthly for 30 years. Calculate your payment.

Answer 1

Answer: $1,540,194.30 .

Explanation:

The formula to calculate the accumulated amount earned on principal (P) at rate of interest (r)[ in decimal] compounded monthly after t years :

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

Given: P= $425,000

r= 4.3% = 0.043

t= 30 years

`A=425000(1+(0.043)/(12))^(12(30))\\\\=425000(1.003583)^(360)\\\\=425000*3.62398657958\approx1540194.30`

Hence, the payment would be $1,540,194.30 .