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You are buying a house priced at $354,125. You plan to pay 20% of the price...

  1. You are buying a house priced at $354,125. You plan to pay 20% of the price for down payment and finance the rest. The mortgage loan you need to borrow lasts 30 years and requires 4.25% interest rate per annum. What is your payment EACH MONTH for the mortgage loan? please show all work
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Answer #1

Loan amount = Present value of future monthly payments = monthly payment * [1-(1+i)^-n]/i

i = interest rate per period

n = number of periods

loan amount = 354125 * 0.8

monthly payment * [1-(1+0.0425/12)^-360]/(0.0425/12) = 283300

=>

monthly payment = 1393.67

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