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You purchase a house for $398,196
You purchase a house for $398,196. You made a down payment of $20,000 and the remainder of the purchase price was financed with a mortgage loan. The mortgage loan is a 30 year mortgage with an annual interest rate of 04.00%. Mortgage payments are made monthly. What is the monthly amount of you mortgage payment?
Expert Solution
Computation of Monthly Amount of Mortgage Payment using PMT Function in Excel:
=pmt(rate,nper,-pv,fv)
Here,
PMT = Monthly Amount of Mortgage Payment = ?
Rate = 4%/12 = 0.3333%
Nper = 30 years * 12 months = 360 months
PV = $398,196 - $20,000 = $378,196
FV = 0
Substituting the values in formula:
=pmt(0.3333%,360,-378196,0)
PMT or Monthly Amount of Mortgage Payment = $1,805.48
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