17. You borrow $196,000 to buy a house. The annual mortgage rate is 5% and the...

Question

Question

Answer 1

Answer #1

PVOrdinary Annuity = C*[(1-(1+i/(f*100))^(-n*f))/(i/(f*100))]

C = Cash flow per period

i = interest rate

n = number of payments I f = frequency of payment

196000= Cash Flow*((1-(1+ 5/1200)^(-25*12))/(5/1200))

Cash Flow = 1145.8

Using Calculator: press buttons "2ND"+"FV" then assign

PV =-196000

I/Y =5/12

N =25*12

FV = 0

CPT PMT

Using Excel

=PMT(rate,nper,pv,fv,type)

=PMT(5/(12*100),12*25,,196000,)

Answer 2

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