The Colemans finance their home with a $90,000 mortgage loan at 9.25% APR. What will their monthly payments be if the load has a term of 15 years?
when i did the calculations i got $926.27 but I'm not sure thats correct
Thank you!
I'm sure you used your formula.
There are lots of mortgage payment calculators online; you can use one of them to check your work. Sounds about right, though.
To calculate the monthly mortgage payments, you can use the formula for a fixed-rate mortgage:
Monthly Payment = (Loan Amount * Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate)^(-Number of Months))
First, let's convert the Annual Percentage Rate (APR) to a Monthly Interest Rate:
Monthly Interest Rate = APR / 12 = 9.25% / 12 = 0.00771 (rounded to 5 decimal places)
Next, let's convert the loan term from years to months:
Number of Months = Loan Term * 12 = 15 * 12 = 180 months
Now we can plug in the values into the formula:
Monthly Payment = (90,000 * 0.00771) / (1 - (1 + 0.00771)^(-180)) = 688.55
Therefore, the monthly mortgage payment for the Colemans would be approximately $688.55.
It appears that your initial calculation of $926.27 is incorrect.
To calculate the monthly payments on a mortgage loan, you can use the formula for Fixed Monthly Payment (PMT) using the Mortgage Payment Formula:
PMT = (P * i) / (1 - (1 + i)^(-n))
Where:
PMT = Monthly payment
P = Loan amount (principal)
i = Monthly interest rate (annual interest rate divided by 12)
n = Total number of payments (number of years multiplied by 12)
Let's calculate it step by step:
1. Convert the annual interest rate to a monthly interest rate:
i = (9.25% / 100) / 12 = 0.0925 / 12 = 0.00770833 (rounded to 8 decimal places)
2. Calculate the total number of payments:
n = Number of years x 12 = 15 x 12 = 180
3. Plug the values into the formula and solve for PMT:
PMT = ($90,000 * 0.00770833) / (1 - (1 + 0.00770833)^-180)
PMT = $694.3983 / (1 - 0.60719916)
PMT = $694.3983 / 0.39280085
PMT ≈ $1,767.42
So, the monthly payments for the Colemans' mortgage loan with a term of 15 years at 9.25% APR would be approximately $1,767.42.
It seems that your calculated result of $926.27 is incorrect. Please double-check your calculations or provide more details if there are any additional factors involved.