SOLUTION: 1. Suppose your parents are interested in buying a house that will cost $180,000. They will use the equity in their present house to make a 20% down payment on the new house and fi

Question 1101016: 1. Suppose your parents are interested in buying a house that will cost $180,000. They will use the equity in their present house to make a 20% down payment on the new house and finance the rest with a 30-year mortgage at an interest rate of 6.5% compounded monthly. What will the monthly payment be? And how much interest will be paid?

Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
$144000 financed
144000=P(1-(1+.065/12)^-360 divided by (.065/12) is the basic set up.
Can multiply through by (.065/12)
758.33=P(1-(1+.065/12))^-360
compute the (1+.065/12)^-360 first, then subtract from 1, then divide the $758.333 by that
$884.90. ANSWER for monthly payment
==================
multiply that by 360 for total payments=$318564.
Subtract the 144000 from that for interest payments, and that is $174,564.

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