A mortgage of $A is obtained at a rate of j₂ = 6%.The mortgage is to be paid off with monthly payments of $700 for 25 years (first payment one month from now).What is A? (Answer to nearest dollar. )

Question

Quizplus · Accepted Answer

The monthly interest rate is 0.06/2 = 0.03. The number of payments is 25*12 = 300. Using the formula for the present value of an annuity, A = 700 * [(1 - (1 + 0.03)^-300) / 0.03], which calculates to approximately $109,408.

A Mortgage of $A Is Obtained at a Rate of J2

A Mortgage of $A Is Obtained at a Rate of J₂