Suppose that you are considering a conventional, fixed-rate 30-year mortgage loan for $100,000. The lender quotes...

Suppose that you are considering a conventional, fixed-rate 30-year mortgage loan for $100,000. The lender quotes an APR of 2.78%, compounded monthly; mortgage payments would be monthly, beginning one month after the closing on your home purchase. What would be your monthly mortgage payment?

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Expert Solution

Information provided:

Mortgage= present value= $100,000

Time= 30 years*12= 360 months

Interest rate= 2.78%/12= 0.2317% per month

The monthly payment is calculated by entering the below in a financial calculator:

PV= -100,000

N= 360

I/Y= 0.2317

Press the CPT key and PMT to compute the monthly payment.

The value obtained is 409.8320.

Therefore, the monthly mortgage payment is $409.83.

In case of any query, kindly comment on the solution.

jeff jeffy answered 1 year ago

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