SOLUTION: the following formula gives the monthly cost <i>M</i> of a mortgage
if the principle (the amount borrowed) is <i>p</i> dollars,
which is to be totally repaid in <i>n</i> months
Algebra.Com
Question 115180: the following formula gives the monthly cost M of a mortgage
if the principle (the amount borrowed) is p dollars,
which is to be totally repaid in n months,
and the monthly interest rate (as a decimal) is r.
simplify the formula
and find the monthly cost of a mortgage with a principal of $120,000 and a monthly rate of 0.8%, to be totally repaid in 25 years.
do i just plug in the numbers?
i can do that, but i just dont know how to simplify this equation.. please help
Answer by solver91311(24713) (Show Source): You can put this solution on YOUR website!
Yes, you just plug in the numbers, just remember that you need n MONTHS, so you need , and 0.8% expressed as a decimal is .008.
The only thing wrong with what you are trying to do is that you have -n as an exponent and it should be +n.
By the way, that is a HORRIBLE interest rate - .008 * 12 = .096 => 9.6% Shop around, you should be able to get something in the neighborhood of 6%, or 0.5% per month. Do the arithmetic and see what the difference in the payment would be in that case.
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