What is the best way to find out the montly payment on a $100,000 mortgage at a rate of 8 1/2% for 20 years
You might try this site.
http://www.bankrate.com/brm/mortgage-calculator.asp
Please use the site Ms. Sue gave you. There is a formula which I will give below but I am sure you are not expected to use it.
monthly payment = amount of loan *[ r/{ 1- (1-r)^-n}
n is the number of payments, 20*12 = 240
r is the yearly interest rate /12 = .085/12 = .007083333
To find out the monthly payment on a mortgage, you can use a formula or an online mortgage calculator. Let's go through both methods:
Method 1: Using the Mortgage Payment Formula
The formula for calculating the monthly payment on a mortgage is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Where:
M = Monthly payment
P = Principal amount (loan amount)
i = Monthly interest rate (annual interest rate divided by 12)
n = Number of payments (loan term in months)
Step 1: Calculate the monthly interest rate.
To do this, divide the annual interest rate by 12 and convert it to a decimal. In this case, the annual interest rate is 8 1/2% (or 8.5%). So, the monthly interest rate (i) will be 8.5% divided by 12, which is 0.007083.
Step 2: Calculate the number of payments.
Since the loan term is 20 years, the number of payments (n) will be 20 multiplied by 12, which is 240.
Step 3: Plug the values into the formula.
Using the formula mentioned earlier, substitute the values:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
M = 100,000 [ 0.007083(1 + 0.007083)^240 ] / [ (1 + 0.007083)^240 – 1 ]
By solving the equation, you will find the monthly payment amount.
Method 2: Using an Online Mortgage Calculator
If you prefer a more convenient approach, you can use an online mortgage calculator. Several websites offer free mortgage calculators where you can input the loan amount, interest rate, and loan term to get the monthly payment instantly. Simply search for "mortgage calculator" on a search engine, and you will find many options to choose from.
By using either of these methods, you can determine the monthly payment for a $100,000 mortgage at an interest rate of 8 1/2% for 20 years.