To calculate the monthly mortgage payment, you can use the financial calculator inputs based on the loan's terms.
Here are the steps and corresponding values for each input you need:
-
N (Number of payments): Since it's a 30-year mortgage and payments are made monthly, you multiply the number of years by 12. \[ N = 30 \text{ years} \times 12 \text{ months/year} = 360 \text{ months} \]
-
i/y (Interest rate per period): The annual interest rate is 4.10%. Since payments are made monthly, you need to convert this to a monthly interest rate by dividing by 12. \[ i/y = 4.10% \div 12 = 0.34167% \text{ (as a decimal, use 0.0041)} \text{ or } 0.34167 \]
-
PMT (Payment): This is what we are trying to find, so you will leave this blank for now or input it as $0 when solving.
-
PV (Present Value): This is the amount of the loan, which is given as $265,351.00, and you enter this as a negative value because it represents an outflow of money. \[ PV = -265351 \]
-
FV (Future Value): Since it's a mortgage, the future value at the end of the loan term is $0 (the loan will be paid off). \[ FV = 0 \]
Now, summarizing:
- N = 360
- i/y = 0.0041 (or 0.34167 as a percentage for some calculators)
- PMT = ? (calculate)
- PV = -265351
- FV = 0
After entering these values into your financial calculator, compute for PMT (monthly payment), and you will get the monthly mortgage payment amount.
1 answer