suppose you purchase a home for $150,000.and obtain a 90% mortgage loan, 30 yr. maturity, at a fixed annual interest rate of 80% with deferred monthly payments. What is the monthly payment for principal and interest on this loan?
Whoa! I think your 80% interest rate is wrong. Please recheck your figures.
sorry it is supposed to be 8.0% fixed interest rate.
Ahh -- that's better. :-)
First you need to find the amount of the mortgage by multiplying $150,000 by .9.
Your teacher may want you to use a mathematical formula to calculate the monthly payments. But you can check your work by plugging your numbers into this site.
http://www.bankrate.com/brm/mortgage-calculator.asp
$29678
To calculate the monthly payment for principal and interest on a mortgage loan, we need a few pieces of information:
1. Loan amount: Since you obtained a 90% mortgage loan, you will need to calculate 90% of the purchase price of the home. In this case:
Loan amount = 90% of $150,000 = $135,000
2. Annual interest rate: The annual interest rate is provided as 80%. However, it seems quite high, so let's assume it is a typo. An interest rate of 80% would be extremely uncommon in a mortgage loan. For the purpose of this calculation, let's assume an interest rate of 8% instead.
3. Loan term: The loan term is given as 30 years.
To calculate the monthly payment, you can use the loan payment formula:
Monthly Payment = P * (r * (1 + r)^n) / ((1 + r)^n - 1)
Where:
P = Loan amount
r = Monthly interest rate (annual interest rate divided by 12)
n = Total number of payments (loan term in years multiplied by 12)
Let's calculate the monthly payment using the information we have:
Loan amount: $135,000
Annual interest rate: 8% (divided by 100 to convert it to a decimal, i.e., 0.08)
Loan term: 30 years (multiplied by 12 to convert it to the total number of payments, i.e., 360 payments)
Monthly interest rate = 8% / 12 = 0.00667
Using these values in the formula:
Monthly Payment = $135,000 * (0.00667 * (1 + 0.00667)^360) / ((1 + 0.00667)^360 - 1)
Calculating this equation will give you the monthly payment for principal and interest on the loan.