Question

Your real estate agent mentions that homes in your price range require a payment of $2200 per qaurter for 20 years at 1.2% interest per quarter. What is the size of the mortgage with these terms?

Answer 1

$112,734.03

Step-by-step explanation:

For a quarterly payment 'A' of $2,200,

rate per quarter 'r' of 1.2%,

and number of quarters 'n' of (20years * 4 quarters/year) = 80 quarters.

The size of the mortgage =

`(A[1-(1+r)^(-n)] )/(r) \\=(2,200[1-(1.012)^(-80)] )/(0.12)`

= $112,734.03.