Answer:
$1699.25
Step-by-step explanation:
Data:
Cost = $314 000
Down payment = 18 %
Term = 20 yr
i = 5 %/yr
Calculations:
(a) Down payment
Down payment = 314 000 × 0.18
= $56 520
(b) Amount financed
Cost = $314 000
-Down payment = 56 520
Financed = $257 480
(c) Monthly payments
The formula for the monthly payment (P) on a loan of A dollars that is paid back in equal monthly payments over n months, at an annual interest rate of i % is
[tex]P = A(\frac{i}{1-(1+i)^{-n}})[/tex]
We must express the interest rate on a monthly basis.
I = 5 %/yr = 0.41 667 %/mo = 0.004 1667
n = 2 × 12 = 240 mo
[tex]P = 257 480(\frac{0.004 1667}{1 - (1+0.004 1667)^{-240}})[/tex]
[tex]P = \frac{1072.83}{1- (1.004 1667)^{-240}}[/tex]
[tex]P = \frac{1072.83}{1 - 0.368 645}[/tex]
[tex]P = \frac{1072.83}{0.631 355}[/tex]
P = $1699.25
Carlos' monthly mortgage payment will be $1699.25.
