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

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

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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.) 

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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

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