Mortgage present value

Question

You obtain a mortgage of $184,000 for a house at an annual interest rate of 5.2% to be paid off in 15 years. find what your monthly payments will be if interest is also charged monthly.

Answer 1

Payment = [interest rate * Present Value]/[1 - (1 + r)^-n]

 

Adjustments to be made include:   (0.052/12)  for the interest; and 12 * 15 = 180 for the number of periods

 

[(0.052)/(12) * 184,000] / [1 - (1 + (0.052/12)^-180]

 

Which is:  797.33 / 0.540793, which is monthly payments of:  $1,474.37

 

 

So, the monthly payments are:  $1,474.37