Please explian I keep messing up 100,000 mortgage at a rate of 8 1/2 for 20 years has a monthly payment of what I am readyto throw this paper out the window
If you are studying this topic you must have come across the formula which in this case would say
100000 = Payment(1-(1.00708333)^(-240))/.00708333
payment = $867.82
Since the amount of interest will decline as the mortgage is gradually paid off, figuring the monthly payments is tedious.
Check this site to find the answer. Note that the numbers in your answer were correct, but the decimal point was in the wrong place.
http://www.bankrate.com/brm/mortgage-calculator.asp?unroundedPayment=867.8232333655338&loanAmount=100000.00&nrOfYears=20&nrOfMonths=240&interestRate=8.50&startMonth=0&startDay=10&startYear=2008&monthlyPayment=867.82&monthlyAdditional=0&yearlyAdditional=0&yearlyAdditionalMonth=0&oneAdditional=0&oneAdditionalMonth=0&oneAdditionalYear=2008&paidOffDate=Jan+10%2C+2028&submit.x=38&submit.y=8
I can understand that dealing with mortgage calculations can be frustrating. Let's break down the process step by step to help you calculate the monthly payment for a $100,000 mortgage at an interest rate of 8 1/2% for a term of 20 years.
1. Convert the interest rate to decimal form: 8 1/2% is equal to 8.5%. Divide it by 100 to get the decimal equivalent which is 0.085.
2. Determine the number of monthly payments: Multiply the number of years (term) by 12 months. In this case, 20 years x 12 months = 240 months.
3. Use the formula for calculating the monthly mortgage payment:
Monthly Payment = P * (r * (1 + r)^n) / ((1 + r)^n - 1)
Where:
P = Principal (amount of mortgage loan) = $100,000
r = Monthly interest rate (decimal equivalent) = 0.085
n = Number of monthly payments = 240
Plugging in these values, the formula becomes:
Monthly Payment = 100,000 * (0.085 * (1 + 0.085)^240) / ((1 + 0.085)^240 - 1)
4. Calculate the result:
Using a calculator or spreadsheet, evaluate the equation to find the monthly payment. The answer comes out to be approximately $840.08.
Therefore, the monthly payment for a $100,000 mortgage at an interest rate of 8 1/2% for 20 years is approximately $840.08.