SOLUTION: MAT: Topics in Contemporary Math Loans 2) When you were looking for a house, you made the mistake of looking outside your price range and completely fell in love with a ho

Question 1194150: MAT: Topics in Contemporary Math
Loans
2) When you were looking for a house, you made the mistake of looking outside your price
range and completely fell in love with a house that, after your initial down payment, still
would have cost $375,000. The bank would still be willing to give you the 3.6%, 30-year
mortgage. What would your monthly mortgage payment be?

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

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

For this particular problem:
L = 375,000 dollars
i = 0.036/12 = 0.003 exactly
n = 30*12 = 360 months (equivalent to 30 years)

Let's find the monthly payment (P) based on those values above.
P = (L*i)/( 1-(1+i)^(-n) )
P = (375000*0.003)/( 1-(1+0.003)^(-360) )
P = 1,704.9200633444
P = 1,704.92 dollars is the monthly payment

Some free calculators found online to help check your work
https://www.bankrate.com/loans/loan-calculator/
https://www.calculator.net/loan-calculator.html

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