Question

2 you wand foto purchase a home for $ 650,000 you have saved $250,000 that you will use to purchase the hume and apply for a mortgage for the remainder. The current interest rate on the luan is 420 4,3%. you decide to take a 30 yeur mutegaye, what is your meathly payment?

Answer 1

Monthly Loan Payment

Here, we’ve Loan Amount (P) = $400,000 [$650,000 - $250,000]

Monthly Interest Rate (n) = 0.358333% per month [4.30% / 12 Months]

Number of months (n) = 360 Months [30 Years x 12 Months]

Therefore, the Monthly Loan Payment = [P x {r (1 + r)ⁿ} ] / [(1 + r)ⁿ – 1]

= [$400,000 x {0.00358333 x (1 + 0.00358333)³⁶⁰}] / [(1 + 0.00358333)³⁶⁰ – 1]

= [$400,000 x {0.00358333 x 3.6244199}] / [3.6244199 – 1]

= [$400,000 x 0.0129875] / 2.6244199

= $5,195.00 / 2.6244199

= $1,979.49

“Hence, the monthly loan payment will be $1,979.49 per month”