Calculate the monthly payment on a $200,000 mortgage if payment is made at the beginning of each month and the annual interest rate is 5.5 percent for 30 years.
A)$1,135.58
B)$1,100.00
C)$1,300.25
D)$11,000.00

Question

Quizplus · Accepted Answer

To calculate the monthly payment, we use the formula:

P = (Pr(1+r)^n) / ((1+r)^n - 1)

Where:
P = monthly payment
r = annual interest rate / 12
n = number of payments (30 years * 12 months = 360)

Plugging in the values, we get:

P = (200,000(.055/12)(1+(.055/12))^360) / ((1+(.055/12))^360 - 1)
P = $1,135.58

Therefore, the best choice is A.

Calculate the Monthly Payment on a $200,000 Mortgage If Payment