Posted by **need help :(** on Wednesday, October 3, 2012 at 3:43pm.

Denise and David purchased a home in Dallas, Texas. In February 2003 for $250,000. They were able to make a down payment of $80,000, and borrowed the rest through a 15 year mortgage at 4.5% compounded semi-annually.

If they make equal monthly payments, how much is each payment?

- Math -
**Reiny**, Wednesday, October 3, 2012 at 3:54pm
So the balance to be mortgaged is 170 000

I am not sure if the rules for mortgage rates are the same in the US as they are in my Canada, but in general the interest period must coincide with the payment period, we have monthly payments but semi-annual compounding.

must find the equivalent monthly rate, let that rate be i

(1+i)^12 = 1.0225)^2

1+i = 1.0225^(1/6) = 1.00371532

i = .00371532

let the payment be P

P( 1 - 1.00371532^-180 )/.00371532 = 170 000

P = ....

I got $1296.88

## Answer This Question

## Related Questions

- Math - Shantle and Kwamie are planning to buy their first home. Although they ...
- math - Model this situation w/ a linear system: Melissa borrowed $10, 000 for ...
- consumer math grade 12 - jesse buys a 150 000 house and will make a 30 000 down ...
- Finance - Say that you purchase a house for $270,000 by getting a mortgage for $...
- Urgent math - A couple needs a mortgage of $300,000. Their mortgage broker ...
- Finance - If a home buyer purchases a home in 2006 for $225,000 with a 10% down ...
- Accounting - Journalize the following transactions and omit the explanations. A...
- Bus Finance - You want to purchase a home. cost $165,000. you have $40,000 ...
- math - The price of a home is $215,000. The Bank requires 20% down payment and ...
- Economics - Calculate the total dollar amount paid for a house purchased for $...

More Related Questions