Determine the monthly payment if you take out a loan for $ 230000 with an annual interest rate of 7% and the term of the loan is 20 years.

Question

Determine the monthly payment if you take out a loan for $ 230000 with an annual interest rate of 7% and the term of the loan is 20 years.

Monthly Payment =

Answer 1

THIS IS USING SIMPLE INTEREST

Assuming their is no down payment and the principal of the loan is $230,000, then we use the equation

Monthly payment = principal x (annual interest rate / 12 months)

Monthly payment = 230,000 x (0.07/12)

Monthly payment is $1,341.67. And total payments are 322,000 with $92,000 going towards interest