Post a New Question


posted by .

15,000 down payment, 20-year mortgage loan with annual 6% interest compounded monthly. The payment is $809. Trying to figure the final selling price. I can do all the steps except for calculating P.

  • math -

    M = Pr/[1-1/(1+r)^n]
    M = payment
    r = monthly rate = 0.005
    n = 20*12 = 240

    809 = P*.005/(1-1/1.005^240)
    P = 809/.005*(1-1/1.005^240)
    P = 112920
    Add in the 15000 down payment, and the selling price was 127920

    However, FYI, this is simple interest, not compound interest. The annual rate is 6%, with monthly payments. At each payment, the .5% monthly interest on the unpaid balance is subtracted first, with the remainder going to reduce the principal.

Answer This Question

First Name
School Subject
Your Answer

Related Questions

More Related Questions

Post a New Question