Finance Math

posted by Heyhi

Oprah Winfrey has closed on a 42-acre estate near Santa Barbara, California, for $50,000,000. If Oprah puts 20% down and finances at 7% for 30 years, what would her monthly payment be?

  1. MsPi_3.14159265

    LOL! Someone asked this same question yesterday... but did not respond when I asked what is the compounding of the loan??

  2. Heyhi

    It was me, I am sorry I did not see what you posted. This problem is related to PMT and then you're supposed to find interest with P1 and P2.

  3. MsPi_3.14159265

    Steve wrote a nice solution several years back...
    M = Pr/(1-(1+r)^-n)

    = 40,000,000*(.07/12)/(1-(1+.07/12)^(-12*30))
    = 266121

  4. Reiny

    I will assume the compounding is monthly to match the payment period, or else we have a messy solution

    i = .07/12 = .00583333...
    n = 360

    paym(1 - 1.0058333..^-360)/.00583333... = .8(50000000)

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