Mortgage Balances (101, CFA1) If a mortgage has monthly payments of $1,258, a life of 30 years, and a rate of 4

Finance Oct 15, 2020

Mortgage Balances (101, CFA1)
If a mortgage has monthly payments of $1,258, a life of 30 years, and a rate of 4.60 percent per year, what is the mortgage amount, (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Expert Solution

Computation of Mortgage Amount using PV Function in Excel:

=-pv(rate,nper,pmt,fv)

Here,

PV = Mortgage Amount = ?

Rate = 4.60%/12 = 0.3833% monthly

Nper = 30 years*12 months = 360 months

PMT = $1,258

FV = 0

Substituting the values in formula:

=-pv(0.3833%,360,1258,0)

PV or Mortgage Amount = $245,394.29

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote