In: Economics
Calculate the monthly payment required to the nearest whole penny for a 30-year fixed-rate mortgage made by the lender at 4.67% annual percentage rate (APR) if the home buyer borrowed $158,000.
We are given the following information:
Payment | PMT | To be calculated |
Rate of interest | r | 4.67% |
Number of years | n | 30.00 |
Monthly | frequency | 12.00 |
Loan amount | PV | 158000.00 |
We need to solve the following equation to arrive at the required PMT
So the monthly payment is $816.60
Below is the amortization schedule:
Opening balance = previous year's closing balance
Closing balance = Opening balance-Principal repayment
PMT is calculated as per the above formula
Interest = 0.0467 /12 x opening balance
Principal repayment = PMT - Interest
Below is the graph of principal and interest values