Say that you purchase a house for $270,000 by getting a mortgage for $235,000 and paying a $35,000 down payment. If you get a 15-year mortgage with a 8 percent interest rate, what are the monthly payments?
assume a bank loan requires an interest payment of $85 per year ans a principal
payment of $1000 at the end of the loan eighty year life.
To calculate the monthly mortgage payments, we need to use the formula for calculating the fixed monthly payment for a mortgage loan. The formula is:
M = P * (r * (1 + r)^n) / ((1 + r)^n - 1),
Where:
M = Monthly mortgage payment
P = Principal loan amount (in this case, the mortgage of $235,000)
r = Monthly interest rate (8% divided by 12 to convert it to a monthly rate)
n = Number of monthly payments (15 years converted to months)
Let's calculate the values:
P = $235,000
r = (8% / 100) / 12 = 0.006666667
n = 15 years * 12 months = 180 months
Now we can plug these values into the formula:
M = 235,000 * (0.006666667 * (1 + 0.006666667)^180) / ((1 + 0.006666667)^180 - 1)
Calculating this equation will give us the monthly mortgage payment.