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31 July, 04:58

Mr. Coffey bought a house for $195,000. He made a 20% down payment. The interest

rate is 5.25% for 30 years. Use the loan payment calculator to answer the following

questions. (do not use commas or dollar signs in your answer)

What is his monthly payment?

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Answers (1)
  1. 31 July, 07:07
    0
    Answer: $861.44

    Explanation:

    Given the following:

    Purchase price = $195,000

    down payment = 20%

    Interest rate = 5.25%

    Period = 30 years

    Down payment = 0.2 * $195,000 = $39,000

    Therefore, loan amount will be:

    $ (195,000 - 39,000) = $156,000

    The payment per period (monthly payment) can be calculated using the annuity calculator.

    Present value = $156,000

    Number of periods = 30yrs = 30 * 12 = 360 months

    Interest = 5.25% / 12 = 0.4375% = 0.004375

    Future value = 0 (Amount when entire loan has been paid)

    Therefore, the payment per period is $861.44 using the financial calculator.
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