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Ken just bought a house. He made a $25,000 down payment and financed the balance with a 20-year home mortgage loan with an interest rate of 5.5% compounded monthly. His monthly mortgage payment is $950.
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Ken just bought a house. He made a $25,000 down payment and financed the balance with a 20-year home mortgage loan with an interest rate of 5.5% compounded monthly. His monthly mortgage payment is $950. What was the sell- ing price of the house

User Mfontani
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1 Answer

1 vote

Answer:

$163,104

Step-by-step explanation:

loan principal = monthly payment x PV annuity factor

monthly payment = $950

PV annuity factor, 0.4583%, 240 periods = 145.3726

loan principal = $950 x 145.3726 = $138,104

the price of the house = down payment + loan = $25,000 + $138,104 = $163,104

User JohnRudolfLewis
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