You decide to take out a 25-year mortgage for $350,000 at 5% APR.What are your monthly payments?

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Quizplus · Accepted Answer

The monthly payment for a 25-year mortgage of $350,000 at 5% APR can be calculated using the formula for a fixed-rate mortgage. The formula is M = P[r(1+r)^n]/[(1+r)^n-1], where M is the monthly payment, P is the principal amount ($350,000), r is the monthly interest rate (annual rate divided by 12 months, so 0.05/12), and n is the total number of payments (25 years * 12 months = 300 payments). Plugging in these values gives a monthly payment of approximately $2,035.62.

You Decide to Take Out a 25-Year Mortgage for $350,000