Question

Question 8 View Policies Show Attempt History Your answer is correct. The Wilson family is buying a new 3,500-square-foot house in Muncie, Indiana, and will borrow $243,700 from Bank One at a rate of 6.084 percent for 15 years. What will be their monthly loan payment? (Round factor values to 4 decimal places, eg. 1.5212 and final answer to 2 decimal places, eg. 15.25.) Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you've been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.) Monthly loan payment $ 2067.56 eTextbook and Media Attempts: 1 of 3 used Send to Gradebook < Prev Submitted to Gradebook, Tue Oct 1, 2019, 4:45:24 PM (America/New York-04:00)

Answer 1

This question requires application of PV of annuity according to which

PV =

1- (1+ г)-т P т Р- Реriodic Раутent т 3D гate per period — питber o f periods

r = 6.084%/12 = 0.507% (monthly),

n = 15 * 12 = 180 months

$243,700 = P * [\frac{1-(1+0.00507)^{-180}}{0.00507}]$

243,700 = P * 117.8687

P = $2,067.56