What is the approximate monthly payment for a 30-year fixed rate mortgage for a home valued at $100,000, if the mortgage interest rate is 8 percent?

Question

Quizplus · Accepted Answer

To calculate the monthly payment on a 30-year fixed rate mortgage, we use the formula:
Payment = (Loan amount x Interest rate) / (1 - (1 + Interest rate)^(-Number of months))
Loan amount = $100,000
Interest rate = 8% = 0.08 (decimal)
Number of months = 30 years x 12 months/year = 360 months
Plugging these values into the formula, we get:
Payment = ($100,000 x 0.08) / (1 - (1 + 0.08)^(-360))
Payment = $733.76
Rounded to the nearest hundred, the answer is $770, which is choice C.

What Is the Approximate Monthly Payment for a 30-Year Fixed