A lakefront cottage is going at $100,000,with a $25,000 down payment,and the remainder mortgaged at 12 % APR,to be amortized over 30 years.What is the monthly mortgage payment?

Question

Quizplus · Accepted Answer

The monthly mortgage payment can be calculated using the formula:M = P * (r * (1 + r)^n) / ((1 + r)^n - 1)where:M = monthly mortgage paymentP = principal amount of the loanr = monthly interest raten = number of months in the loan termIn this case, the principal amount of the loan is $100,000 - $25,000 = $75,000, the monthly interest rate is 12% / 12 = 1%, and the number of months in the loan term is 30 * 12 = 360.Plugging these values into the formula, we get:M = 75000 * (0.01 * (1 + 0.01)^360) / ((1 + 0.01)^360 - 1)= 75000 * (0.01 * 2.71456) / (2.71456 - 1)= 75000 * 0.0271456 / 1.71456= $771.46Therefore, the correct answer is A) $771.46.

A Lakefront Cottage Is Going at $100,000,with a $25,000 Down