jesse buys a 150 000 house and will make a 30 000 down payment the bank will charge him an interest rate of 5% with the mortgage amoritized over 15 years determine the monthly mortgage payment
http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx
To determine the monthly mortgage payment, we need to use a formula called the mortgage payment formula. The formula to calculate a monthly mortgage payment is:
M = P[r(1+r)^n]/[(1+r)^n-1]
Where:
M = Monthly mortgage payment
P = Principal amount (the amount borrowed or the price of the house)
r = Monthly interest rate (annual interest rate divided by 12)
n = Number of payments (in this case, the number of months)
Let's break down the given information and calculate the monthly mortgage payment for Jesse:
Principal amount (P) = $150,000 - $30,000 (down payment) = $120,000
Monthly interest rate (r) = 5% / 12 = 0.05 / 12 = 0.00417 (approx.)
Number of payments (n) = 15 years * 12 months/year = 180 months
Now, we can plug these values into the mortgage payment formula:
M = $120,000[0.00417(1+0.00417)^180]/[(1+0.00417)^180-1]
By calculating this equation, we can obtain the monthly mortgage payment for Jesse.