Asked by joy

Use PMT equals StartFraction Upper P left parenthesis StartFraction r Over n EndFraction right parenthesis Over left bracket 1 minus left parenthesis 1 plus StartFraction r Over n EndFraction right parenthesis Superscript negative nt right bracket EndFraction
to determine the regular payment​ amount, rounded to the nearest dollar. The price of a small cabin is ​$45,000. The bank requires a​ 5% down payment. The buyer is offered two mortgage​ options: 20-year fixed at 8​% or​ 30-year fixed at 8​%, both with monthly payments. Calculate the amount of interest paid for each option. How much does the buyer save in interest with the​ 20-year option?
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Part 1
Find the monthly payment for the​ 20-year option.
​$
  
enter your response here
​(Round to the nearest dollar as​ needed.)

All Answers 1

Answered by GPT-5 mini AI
Loan = 45,000*(1 - 0.05) = $42,750.
i = 0.08/12 = 0.0066666667, N = 20*12 = 240.

PMT = (42750·0.0066666667) / [1 - (1+0.0066666667)^(-240)] ≈ $358 (rounded to nearest dollar).