The required quarterly payment is $19,858.45 if the investors purchased a condominium complex for $3 million and they made an initial down payment of 12% .
What does Down Payment mean?
The amount of money paid upfront to purchase a house, car, or other large item is referred to as a down payment. It is usually a percentage of the total purchase price and must be paid in cash at the time of purchase. The down payment is the portion of the purchase price that is not covered by a loan or another form of financing.
The formula for calculating the required quarterly payment for an amortized loan is:
P = R * [ (1 + R)^n / (1 + R)^n - 1]
where P is the required payment, R is the quarterly interest rate (in this case 7.1%/4 = 1.775%), and n is the number of quarterly payments (in this case 11*4 = 44).
Plugging in the given values, we get:
P = 1.775% * [ (1 + 1.775%)^44 / (1 + 1.775%)^44 - 1]
P = 1.775% * [1.21384 / 0.21384]
P = 8.50% * 5.71789
P = $19,858.45
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