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Answer #1

Question 47.

Given,

Price of house = $500000

Annual interest rate = 3% or 0.03

Term = 30 years

Solution :-

Loan amount = Price of house - (price of house x 10%)

= $500000 - ($500000 x 10%)

= $500000 - $50000 = $450000

Monthly interest rate (r) = 0.03/12 = 0.0025

Number of months (n) = 30 years x 12 = 360

Now,

Monthly payment

= (Loan amount x r) \div [1 - (1 + r)-n]

= ($450000 x 0.0025) \div [1 - (1 + 0.0025)-360]

= $1125 \div [1 - (1.0025)-360]

= $1125 \div [1 - 0.4070265462]

= $1125 \div 0.5929734538

= $1897.22

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