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Homework answers / question archive / Mr and Mrs
Mr and Mrs. white applied to their credit union for a first mortgage of $190 000 to buy a house. The mortgage is to be amortized over 25 years and interest on the mortgage is 4.9% compounded semi-annually. What is the size of the monthly payment if payments are made at the end of each month?
ANSWER
Cost - 190,000
time - 25 x 2 = 50
mortgage rate (r) = 4.9%/2 = 2.45%
Monthly payments = p x r x (1+r)n / (1+r)n -1
= 190,000 x 2.45% x (1+0.0245)50 / (1+0.0245)50 - 1
= 6,632
