You just purchased a house and have signed a 30-year mortgage for $500,000 with a 12%...
You just purchased a house and have signed a 30-year mortgage for $500,000 with a 12% annual interest rate. What will be your monthly mortgage payment for this home?
Homework Answers
| Monthly payment | = | Loan amount | / | Present value of annuity of 1 | ||||
| = | $ 5,00,000 | / | 97.21833 | |||||
| = | $ 5,143.06 | |||||||
| Working: | ||||||||
| Present value of annuity of 1 | = | (1-(1+i)^-n)/i | Where, | |||||
| = | (1-(1+0.01)^-360)/0.01 | i | = | 12%/12 | = | 0.01 | ||
| = | 97.21833108 | n | = | 30*12 | = | 360 | ||
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