Solve the problem. If necessary, use the table of monthly payments below. Round your answer to the nearest cent.
Monthly Payments to Repay Principal and Interest on a $1000 Mortgage
-Find the monthly payment needed to amortize principal and interest for the following fixed-rate mortgage.
Mortgage amount: $80,300
Term of mortgage: 20 years
Interest rate: 10.5%

Question

Solve the problem. If necessary, use the table of monthly payments below. Round your answer to the nearest cent.
Monthly Payments to Repay Principal and Interest on a $1000 Mortgage 
-Find the monthly payment needed to amortize principal and interest for the following fixed-rate mortgage.
Mortgage amount: $80,300
Term of mortgage: 20 years
Interest rate: 10.5%

Quizplus · Accepted Answer

The monthly payment needed to amortize principal and interest for the given mortgage is $801.70. This can be calculated using the formula for monthly mortgage payments:M = P * (r * (1 + r)^n) / ((1 + r)^n - 1)where:M = monthly paymentP = principal amountr = monthly interest raten = number of months in the term of the mortgageIn this case, the principal amount is $80,300, the monthly interest rate is 10.5% / 12 = 0.00875, and the number of months in the term of the mortgage is 20 * 12 = 240. Plugging these values into the formula, we get:M = 80300 * (0.00875 * (1 + 0.00875)^240) / ((1 + 0.00875)^240 - 1)= 80300 * (0.00875 * 13.499) / (13.499 - 1)= 80300 * 0.1183 / 12.499= 801.70Therefore, the monthly payment needed to amortize principal and interest for the given mortgage is $801.70.

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