please check my answer :)
The monthly payment of a $100,000 mortgage at a rate of 8 1/2 % for 20 years is 8678.23
Does a payment of almost 9 thousand dollars a month make sense to you? At that rate, you'd have the mortgage paid in about a year (12 * $9,000 = $108,000.
$867.82
To check the answer, we can use the formula for calculating monthly mortgage payments:
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 / 12)
n = Number of months
Let's calculate it step by step:
1. Convert the annual interest rate to a monthly interest rate:
i = 8.5% / 12 = 0.0070833
2. Convert the loan term from years to months:
n = 20 years * 12 = 240 months
3. Plug the values into the formula:
M = 100000 [0.0070833(1+0.0070833)^240] / [(1+0.0070833)^240 - 1]
Now let's calculate the monthly payment:
M = 100000 [0.0070833(1.0070833)^240] / [(1.0070833)^240 - 1]
Using a calculator or spreadsheet, you'll find that the result is approximately 859.32, not 8678.23.
Therefore, the provided monthly payment of $8678.23 is incorrect. The correct monthly payment for a $100,000 mortgage at a rate of 8 1/2 % for 20 years is approximately $859.32.