A 20-year mortgage has an annual interest rate of 5 percent and a loan amount of...

Question

Question

A 20-year mortgage has an annual interest rate of 5 percent and a loan amount of $150,000. What are the monthly mortgage payments?

Answer 1

Answer #1

Information provided:

Present value= $150,000

Interest rate= 5%/12= 0.4167% per month

Time= 20 years*12= 240 months

The monthly mortgage payment is calculated by entering the below in a financial calculator:

PV= -150,000

I/Y= 0.4167

N= 240

Press the CPT key and PMT to compute the monthly mortgage payment.

The value obtained is 989.93.

Therefore, the monthly mortgage payment is $989.93.

In case of any query, kindly comment on the solution.

Answer 2

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