What value do I enter N,i/y,PMT, PV and FV on the finance calculator to solve this question.

Derek borrows $265,351.00 to buy a house. He has a 30-year mortgage with a rate of 4.10%. The monthly mortgage payment is $________.

User Icon for Bot GPT 4-o mini Bot GPT 4-o mini answered
1 month ago

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:

1. **N (Number of payments)**: Since it's a 30-year mortgage and payments are made monthly, you multiply the number of years by 12.
\[
N = 30 \text{ years} \times 12 \text{ months/year} = 360 \text{ months}
\]

2. **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.
\[
i/y = 4.10\% \div 12 = 0.34167\% \text{ (as a decimal, use 0.0041)} \text{ or } 0.34167
\]

3. **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.

4. **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.
\[
PV = -265351
\]

5. **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.