You are borrowing $200,000 to buy a house. The terms of the mortgage call for monthly...

You are borrowing $200,000 to buy a house. The terms of the mortgage call for monthly payments for 30 years at 6% interest. What is the amount of each monthly payment?
A. $1171.91
B. $1199.10
C. $1161.14
D. $1230.15

Solutions

Expert Solution

Ans B. $1199.10

P =	Monthly Payments
PV =	Loan Amount
r =	rate of interest
n =	no of periods

P =	r (PV)
	1 - (1 + r )^-n

P =	(6%/12)*200000
	1 - (1 / (1 + 6%/12)^360))

P =	1000
	0.833958072

P =	1199.10

jeff jeffy answered 2 years ago

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