You want to purchase a new condominium that costs $287,500.Your plan is to pay 25 percent down in cash and finance the balance over 15 years at 3.75 percent.What will be your monthly mortgage payment including principal and interest?

Question

Quizplus · Accepted Answer

The correct answer is A. The monthly mortgage payment can be calculated using the formula P * (r * (1 + r)^n) / ((1 + r)^n - 1), where P is the loan amount, r is the monthly interest rate, and n is the number of months. In this case, P = $287,500 * 0.75 = $215,625, r = 3.75% / 12 = 0.003125, and n = 15 * 12 = 180. Plugging these values into the formula, we get P * (r * (1 + r)^n) / ((1 + r)^n - 1) = $215,625 * (0.003125 * (1 + 0.003125)^180) / ((1 + 0.003125)^180 - 1) = $1,568.07.

You Want to Purchase a New Condominium That Costs $287,500