SOLUTION: Suppose you want to purchase a $ 195000 house. If you put 20% down and finance the rest in a 15 year mortgage at an interest rate of 4%, what will your monthly payments be? Monthl

Question 1199129: Suppose you want to purchase a $ 195000 house. If you put 20% down and finance the rest in a 15 year mortgage at an interest rate of 4%, what will your monthly payments be?
Monthly payment =
Found 2 solutions by Theo, math_tutor2020:
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
sale price is 195000
down payment is .20 * 195000 = 39000
finance loan is 195000 - 39000 = 156000

using the financial calculator at https://arachnoid.com/finance/ the payment at the end of each month is equal to 1531.91.

inputs were:
pv = 156000
fv = 0
np = 15 * 12 = 180 months
ir = 4% / 12 = .33333.....% per month
payment is at the end of each month.

output was:
pmt = -1531.91

pv is positive because it's money coming in.
pmt is negative because it's money going out.
the calculator requires those conventions to work properly.

here's what the result from the calculator looks like.

Answer by math_tutor2020(3816) (Show Source): You can put this solution on YOUR website!

20% of $195,000 = 0.20*195000 = 39000
Down payment is $39,000

Remaining amount is 195000-39000 = 156,000
Note that 80% of 195,000 = 156,000

Monthly payment formula
P = (L*i)/( 1 - (1+i)^(-n) )
where,
L = loan amount
i = monthly interest rate in decimal form
n = number of months

We have these input values
L = 156000
i = 0.04/12 = 0.00333333 approximately
n = 15*12 = 180 months

Let's compute the value of P.
P = (L*i)/( 1 - (1+i)^(-n) )
P = (156000*0.00333333)/( 1 - (1+0.00333333)^(-180) )
P = 1153.91285124951
P = 1153.91

Answer: The monthly payment is $1153.91

---------------------------------------------------------

As verification, you can use the calculator the tutor @Theo mentioned.
Keep in mind the answer is 1153.91 and NOT 1531.91; it appears he mixed up the digits.

Another TVM solver is this one here
https://www.geogebra.org/m/mvv2nus2
which emulates the TVM solver in a TI83 and TI84.

The inputs will be:
N = 180
I% = 4
PV = 156000
PMT = left blank or set to whatever you want
FV = 0
P/Y = 12
C/Y = 12
Do not type in dollar signs or commas into any of the boxes.
Here's an explanation of each input:
N represents the number of months in this context
I% is the annual interest rate as a percentage
PV is the present value, aka starting loan amount
FV = 0 to indicate we want the future value of the loan, aka final balance, to be $0 when it's all paid off
P/Y = 12 means there are 12 payments per year
C/Y = 12 means there are 12 compoundings per year
After the items are filled into the proper boxes, press the "Solve for PMT" button to have -1153.91 show up in that box.
This value is negative to represent a cash outflow.

RELATED QUESTIONS
1. Suppose your parents are interested in buying a house that will cost $180,000. They... (answered by Boreal)
The Brown's want to purchase a house that costs $130,000. They plan to take out a... (answered by rcmcc)
I HAVE TWO QUESTIONS! PLEASE HELP! SUPPOSE THAT YOU WANT TO PURCHASE A HOME FOR... (answered by aprylk25)
suppose your parents are interested in buying a house that will cost $ 180000. they will... (answered by Theo)
You want to buy a $242,000 home. You plan to pay 10% as a down payment, and take out a 30 (answered by greenestamps)
My teacher didn't give me any formulas for these things.. please help me!! T~T 1. You (answered by KMST)
You want to buy a $238,000 home. You plan to pay 5% as a down payment, and take out a 30... (answered by math_tutor2020)
You buy a house for $285,000. You put $60,000 down and take out a mortgage at 6.5% on the (answered by Fombitz)
I do not understand word problems very well and I was wondering if you could help me.... (answered by chessace)