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 4.25 percent for 15 years.
A) $1,111
B) $13,714.22
C) $1,400.25
D) $1,504.56

Question

Quizplus · Accepted Answer

The monthly payment can be calculated using the formula:PMT = (P * r) / (1 - (1 + r)^(-n))where:P is the principal amount of the loanr is the monthly interest rate (annual interest rate / 12)n is the total number of payments (number of years * 12)In this case, we have:P = $200,000r = 4.25% / 12 = 0.003542n = 15 * 12 = 180Plugging these values into the formula, we get:PMT = (200000 * 0.003542) / (1 - (1 + 0.003542)^(-180))PMT = $1,504.56Therefore, the monthly payment on the mortgage is $1,504.56.

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