Kandace have been approved for a $250,000, 30 year mortgage with an APR of 4.5%. What is their monthly payment rounded to the nearest dollar?
M = P(r/n)/(1-(1+r/n)^-nt)
= 250000*0.045/12 / (1 - (1+.045/12)^(-12*360))
= 937.50
oops That's 12*30
M = 1266.71
Thank you so very much!
To calculate the monthly payment for a mortgage, we can use a formula called the mortgage payment formula.
The formula to calculate the monthly payment is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Monthly payment
P = Loan amount (in this case, $250,000)
i = Monthly interest rate (APR/12)
n = Number of payments (30 years * 12 months)
Let's calculate it step by step:
1. First, calculate the monthly interest rate (i):
i = APR/12
= 4.5%/12
= 0.045/12
= 0.00375
2. Next, calculate the total number of payments (n):
n = 30 years * 12 months
= 360 months
3. Plug in the values into the formula:
M = $250,000 * [0.00375(1 + 0.00375)^360] / [(1 + 0.00375)^360 – 1]
4. Solve the equation to find the monthly payment.
By using a calculator or spreadsheet software, you can calculate the monthly payment to be approximately $1,266.71. This value should be rounded to the nearest dollar.
Therefore, Kandace's monthly payment for the $250,000 mortgage with an APR of 4.5% and a term of 30 years is approximately $1,267.