Math - Personal Finance

Ina is negotiating a mortgage of $145 000 for her new house. Determine Ina's monthly payments for a mortgage at 5% annum, compounded semi-annually, amortized over 25 years. How much will Ina pay over the 25 years to pay off this mortgage?

  1. 👍 0
  2. 👎 0
  3. 👁 72
  1. To use the formula for a series of payments, such as carpayments, and mortgages, the period of compounding and the period of payments must be the same.
    Yours has the interest compounded semi-annually, and the payments are monthly, which does not match up
    So we have to find the monthly rate equalent to a rate of 5% per annum compounded semi-annually

    let the monthly rate be i , then
    (1+i)^6 = 1.025
    1+i = 1.025^(1/6) = 1.004123915
    i = .0041239... ----- I stored that in my calculator

    let the payment be P

    P(1 - 1.0041239..^-300)/.0041239... = 145000
    ...
    P = $843.33

    1. 👍 0
    2. 👎 0
    posted by Reiny

Respond to this Question

First Name

Your Response

Similar Questions

  1. Math

    A mortgage of 200 000 is required to purchase a house. The mortgage will be repaid with equal monthly payments over 25 years at 10% compounded monthly. what is the monthly payment

    asked by Jennfier kosner on July 20, 2016
  2. math

    The Johnsons have accumulated a nest egg of $19,000 that they intend to use as a down payment toward the purchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, they have

    asked by amy on February 7, 2011
  3. cis

    1. Find a mortgage loan calculator to determine what your monthly payments would be on a new house borrowing $200,000 for 15 years at 3.5% interest. What is your monthly payment? (Include the URL)

    asked by jones on December 1, 2012
  4. Finance

    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?

    asked by Brittany on February 27, 2012
  5. Economics question

    14. Inflation increases the prices of all goods by 20%. At the same time, Ina’s income increases from $50,000 to $55,000. Compare the situation after both of these changes have happened with the situation before any of these

    asked by Jordon on October 19, 2008
  6. Math

    The Johnsons have accumulated a nest egg of $27,000 that they intend to use as a down payment toward the purchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, they have

    asked by Joe on October 1, 2013
  7. Math

    Sarah secured a bank loan of $200,000 for the purchase of a house. The mortgage is to be amortized through monthly payments for a term of 15 yr, with interest rate of 6%/year compounded monthly on the unpaid balance. She plans to

    asked by Sara on May 15, 2012
  8. finance

    You take out a 25-year $210,000 mortgage loan with an APR of 12% and monthly payments. In 16 years you decide to sell your house and pay off the mortgage. What is the principal balance on the loan?

    asked by Anonymous on November 20, 2012
  9. Finance

    You take out a 30-year $100,000 mortgage loan with an APR of 6 percent and monthly payments. In 12 years you decide to sell your house and pay off the mortgage. What is the principal balance on the loan?

    asked by Anonymous on May 10, 2008
  10. Business

    Bob buys a house for 150,000 with a mortgage rate of 5.8% convertible monthly. At the time of purchase he owns a 10,000 20-year zero coupon bond that earns 4.5% annually. The bond matures in 15 yeas. He would like to use the

    asked by John on April 6, 2014

More Similar Questions