What is the monthly mortgage payment on a $225,000, 25-year loan if the interest rate is 4.50%?

Question

Quizplus · Accepted Answer

The monthly mortgage payment can be calculated using the formula for a fixed-rate mortgage: M = P[r(1+r)^n]/[(1+r)^n – 1], where P is the loan principal ($225,000), r is the monthly interest rate (4.50% annual rate divided by 12 months = 0.00375), and n is the number of payments (25 years * 12 months = 300). Plugging in these values gives a monthly payment of approximately $1,250.62.

What Is the Monthly Mortgage Payment on a $225,000, 25-Year