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You are considering taking out a $200,000 mortgage to buy a house
You are considering taking out a $200,000 mortgage to buy a house. Your bank will charge you a 6% APR (compounded monthly) on a 30 year mortgage with monthly payments. Your first payment is due in one month. Calculate the monthly payment for this mortgage. $199.10 $555.56 Tect! $1,199.10 S12.335.60
Expert Solution
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N = 30 * 12 = 360 (The Mortgage is for 30 years, as monthly, so multiplied by 12)
PV = -200,000 (The present value of the Mortgage is $200,000)
FV = 0 (The Mortgage will be paid in full after 30 years)
I/Y = 6 / 12 = 0.5 (As yearly rate is 6%, so monthly will be divided by 12)
CPT + PMT = 1,199.10
So the Payment should be 1,199.10
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