Michael Bruce buys a house for $375,00. He pays $65,000 down and takes out. a 30-year...

Michael Bruce buys a house for $375,00. He pays $65,000 down and takes out. a 30-year mortgage on the balance. if the i interest rate on the loan is 6.5% what are his monthly payments.
write variable/ values used and the formula expression needed to calculate the answer
formula abbreviation such as PVOA

Expert Solution

Cost of house = $ 375,000

Down payment = $ 65,000

Loan amount = 375,000 - 65,000 = $ 310,000

Number of years = 30 = 30*12 = 360 periods

Rate, r = 6.5%/12

The formula for PVOA is

So 310,000 = P*( 1-(1+6.5%/12)^-360]/6.5%/12

Solving for P, we get

Monthly payment , P = $ 1,959.41

jeff jeffy answered 2 years ago

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