Question
Rebecca and Tom Payton have decided to buy a home that costs $200,000. The Paytons can put down 20% of the home's price. They have applied for a 15-year, 9% FRM to finance the balance. They Paytons have a combined gross annual income of $70,000.
How much will the Paytons pay to satisfy their mortgage loan, if they make all the payments on time for the amount being financed?
How much will the Paytons pay to satisfy their mortgage loan, if they make all the payments on time for the amount being financed?
Answers
MathMate
20% down, so there is P=$160000 left for the mortgage.
Period, n = 15 years
rate = 15%,
rate multiplier, R = 1.15
Assume interest is compounded yearly.
Let Yearly payment = A
then A is given by the mortgage formula
PR^n = A(R^n-1)/(R-1)
or
A=PR^n*(R-1)/(R^n-1)
=160000*1.15^15*(1.15-1)/(1.15^15-1)
=27,362.73
Monthly payment
=27,362.73/12
=2280.23
Period, n = 15 years
rate = 15%,
rate multiplier, R = 1.15
Assume interest is compounded yearly.
Let Yearly payment = A
then A is given by the mortgage formula
PR^n = A(R^n-1)/(R-1)
or
A=PR^n*(R-1)/(R^n-1)
=160000*1.15^15*(1.15-1)/(1.15^15-1)
=27,362.73
Monthly payment
=27,362.73/12
=2280.23
Anonymous
uhm..it's a multiple choice questions and that isn't one of the choices :/