You want to purchase a new condominium that costs $325,000.Your plan is to pay 20 percent down in cash and finance the balance over 15 years at 4.1 percent.What will be your monthly mortgage payment including principal and interest?

Question

Quizplus · Accepted Answer

To calculate the monthly mortgage payment, first determine the loan amount: $325,000 - 20% down payment = $260,000. Then, use the formula for a fixed-rate mortgage: M = P[r(1+r)^n]/[(1+r)^n – 1], where P is the loan amount ($260,000), r is the monthly interest rate (4.1% annual rate / 12 months = 0.0034167), and n is the number of payments (15 years * 12 months = 180). Plugging in these values gives a monthly payment of approximately $1,936.24.

You Want to Purchase a New Condominium That Costs $325,000