You wish to purchase a condo at a cost of $175 000.You are able to make a down payment of $35 000 and will borrow $140 000 for 30 years at an interest rate of 7.25%.How much is your monthly payment? To solve this problem with an Microsoft Excel spreadsheet, you would enter [blank].

Question

Quizplus · Accepted Answer

To calculate the monthly payment for a loan, we use the PMT function in Excel. The inputs for the PMT function are (rate, nper, pv, [fv], [type]). In this case, we have a monthly interest rate of 7.25%/12, a loan term of 30 years or 360 months (nper), a loan amount of $140 000 (pv), no future value ([fv]), and one payment due at the beginning of the period ([type]=1). So, the correct formula is =PMT(.0725/12,360,140000,0,1). Therefore, the answer is B.

You Wish to Purchase a Condo at a Cost of $175