Sherry Smart is buying a $350,000 home and will pay the mortgage monthly for 30 years. She has a good credit score and has qualified for a 5.125% loan interest. How much will she be paying monthly for the home?

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 amount ($350,000), r is the monthly interest rate (5.125% annual rate / 12 months = 0.004270833), and n is the number of payments (30 years * 12 months = 360). Plugging in these values gives a monthly payment of approximately $1,318.69.

Sherry Smart Is Buying a $350,000 Home and Will Pay