Problem 17 Intro You took out a mortgage for $300,000. You need to pay $2,937 every...

Question

Question

Problem 17 Intro You took out a mortgage for $300,000. You need to pay $2,937 every month for 15 years. Attempt 3/10 for 10 p

Answer 1

Answer #1

Calculation of Monthly Interest Rate :

Using Rate Function of Excel :

=RATE(nper,pmt,pv,fv)

where

nper is the number of payments ui.e 15 * 12 = 180 (Multiplied by 12 as monthly payments)

pmt is the monthly payment i.e 2937

pv is the amount of mortgage i.e 300,000

fv is future value i.e 0

=RATE(180,2937,-300000,0)

Therefore Monthly rate of interest is 0.7002% or 0.0070

Answer 2

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