Posted by lynne on .
The Chavara family buys a house for $225,000. They pay $50,000 down and take out a 30-year mortgage on the balance. Find their monthly payment and the total amount of interest they will pay if the interest rate is 6%.
I will assume the rate is 6% per annum compounded monthly
i = .06/12 = .005
n = 30x12 = 360
outstanding balance = 225000-50000 = 175000
let the payment be P
175000 = P[ 1 - 1.005^-360 ]/.005
solve for P
(I got 1049.21)