Question

You found your dream house. It will cost you $200000 and you will put down $35000 as a down payment. For the rest you get a 30-year 5.5% mortgage. What will be your monthly mortgage payment in $ (assume no early repayment)?

Your Answer:

Question 11 options:

Answer

Hide hint for Question 11
Mortgage monthly payment N=30 years*12 month each year=360 I/Y=monthly interest rate= annual interest rate/12 PV= house price- down payment (money you will need to borrow from the bank) PMT(mortgage monthly payment)=? FV=0 (it is zero since you will pay off the mortgage in 30 years) CPT(compute) PMT

Answer 1

Mortgage amount or loan amount (PV) = cost of house - down payment

=200000-35000

=165000

number of total month (n) =30*12 =360

interest rate (i) =5.5%/12 =0.004583333333

Monthly Payment formula = P* i *((1+i)^n)/((1+i)^n-1)

=165000*0.004583333333*((1+0.004583333333)^360)/(((1+0.004583333333)^360)-1)

=936.8518522

So monthly payment is $936.85

fiancial calculator steps:

rate =5.5%/12 =0.004583333333

n = 30*12 =360

loan or PV = -165000

loan balance at end or FV = 0

Press CPT and PMT

result is $936.85