Question

The Bergkamp's are buying a new home and will borrow $210,000 at a rate of 5.5% for 15 years compounded monthly. What will be their monthly loan payment? Round your answer to the nearest whole number and no commas Answer:

Answer 1

Answer of Requirement 1:

Amount borrowed = $210,000
Annual interest rate = 5.50%
Monthly interest rate = 0.45833%
Period = 15 years or 180 months

Let monthly payment be $x

$210,000 = $x/1.0045833 + $x/1.0045833^2 + … + $x/1.0045833^179 + $x/1.0045833^180
$210,000 = $x * (1 - (1/1.0045833)^180) / 0.0045833
$210,000 = $x * 122.386837
$x = $1,716

Monthly payment = $1,716