Question

14. You purchase a $255,000 house and pay 20% down. Obtain a fixed-rate mortgage where annual interest rate is 5.85% and there are 360 monthly payments. What is the monthly payment?

Answer 1

Answer:

$1179.88

Explanation:

After making downpayment, the remaining amount is $255,000 x 0.8 = $200,000

PV = $200,000

i/r = 5.85% / year = 0.4875% / month

n = 360

FV = 0

PMT = ? (Monthly payment = ?)

--> PMT = $1179.88