document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1114938>Question 1114938</A>: <I><SPAN STYLE=\"word-break: break-all;\"> In order to purchase a home, a family borrows $90,000 at an annual interest rate of 10%, to be paid back over a 30 year period in equal monthly payments. What is their monthly payment?\r<BR>\n" );
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document.write( "Annual rate given on table is 8.77572 </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #729898 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=729898\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> 90,000 dollars at 10% interest per year compounded monthly will require a payment of 789.8144131 at the end of each month for 360 months.\r<BR>\n" );
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document.write( "it is calculated based on a term of 30 * 12 = 360 months and a monthly interest rate of 10% / 12 = .83333333333333 percent.\r<BR>\n" );
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document.write( "if you made the loan amount 1000 dollars, then you would get a monthly payment of 8.775715701 per month, to be paid at the end of each month.\r<BR>\n" );
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document.write( "that's the same at 8.77572 when you round it to 5 decimal digits.\r<BR>\n" );
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document.write( "what the table is showing you is the amount you would have to pay at the end of each month for every 1000 dollars you borrow.\r<BR>\n" );
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document.write( "since you borrowed 90,000, then your monthly payment is 8.77572 * 90,000 / 1,000 = 789.8148.\r<BR>\n" );
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document.write( "that's very close to the monthly payment i got of 789.8144131 when using a financial calculator.\r<BR>\n" );
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document.write( "the difference is in the rounding.\r<BR>\n" );
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document.write( "the tables are just to give you an idea of what the payments will be.\r<BR>\n" );
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document.write( "the actual payment is based on financial formulas built into the calculator used by the bank.\r<BR>\n" );
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document.write( "your payment is usually rounded to the nearest penny.\r<BR>\n" );
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document.write( "there may be an adjustment in the last payment so that it comes out accurate according to what the calculator says it should be.\r<BR>\n" );
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document.write( "the following printout of an excel spreadsheet shows what adjustment might be made to the last paument in order for the remaining balance to be equal to 0.\r<BR>\n" );
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document.write( "the left side calculations use the computer generated payment not rounded to the nearest penny.\r<BR>\n" );
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document.write( "the right side calculations use the payment rounded to the nearest penny with an adjustment in the last payment to make the remaining balance equal to 0.\r<BR>\n" );
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document.write( "the last payment, however, would probably be adjusted to the nearest penny, which i neglected to do.\r<BR>\n" );
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document.write( "since i don't know what the banks actually do, this is merely a guess as to how the final payment might be adjusted, if it is even adjusted at all.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2018/041701.jpg\" alt=\"$$$\" >\r<BR>\n" );
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