Question

A $70,000 mortgage is $629.81 per month. What was the percent and for how many years?
9%, 20 years
9%, 30 years
7%, 20 years
9%, 25 years

Answer 1

The interest percent and the maturity period of the $70,000 mortgage with a monthly payment of $629.81 are A. 9%, 20 years.

How can the monthly payments be calculated?

The monthly payments can be computed using the present value annuity table or formula.

However, to compute the percent interest and the maturity period, we can use an online finance calculator as below by inputting the calculated monthly payments.

Thus, at an interest rate of 9% for 20 years and a monthly payment of $629.81, the present value of $70,000 will be equal.

Data and Calculations;

N (# of periods) = 240 (20 years x 12)

I/Y (Interest per year) = 9%

PMT (Periodic Payment) = $629.81

FV (Future Value) = $0

Results:

PV = $70,000.20

Sum of all periodic payments = $151,154.40 ($629.81 x 240)

Total Interest $81,154.20

The interest percent and the maturity period of the $70,000 mortgage with a monthly payment of $629.81 are A. 9%, 20 years.

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