Question

Determine the monthly principal and interest payment for a 15-year mortgage when the amount financed is $95.000 and the annual percentage rate (APR) is 7.0%. The monthly principal and interest payment is $| (Round to the nearest cent as needed.)

Answer 1

Given

Loan Amount taken(Present Value Annuity) = 95.000$

Annual rate (r) = 7%

Number of years (n) = 15 Years

Frequency (m) = 12 = Monthly

Present Value Annuity = Annuity *{(1-(1/(1+(r/m))^(m*n)))/(r/m)}

95000 = Annuity *{(1-(1/(1+(0.07/12)^(12*15)))/(0.07/12)}

95000 = Annuity *111.2560

Annuity = 95000/111.2560

Monthly Annuity = 853.8869 $

Therefore Monthly Annuity = 900$