document.write( "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?
\n" ); document.write( "Monthly payment = \n" ); document.write( "
Algebra.Com's Answer #832851 by math_tutor2020(3817)\"\" \"About 
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\n" ); document.write( "20% of $195,000 = 0.20*195000 = 39000
\n" ); document.write( "Down payment is $39,000\r
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\n" ); document.write( "\n" ); document.write( "Remaining amount is 195000-39000 = 156,000
\n" ); document.write( "Note that 80% of 195,000 = 156,000\r
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\n" ); document.write( "\n" ); document.write( "Monthly payment formula
\n" ); document.write( "P = (L*i)/( 1 - (1+i)^(-n) )
\n" ); document.write( "where,
\n" ); document.write( "L = loan amount
\n" ); document.write( "i = monthly interest rate in decimal form
\n" ); document.write( "n = number of months\r
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\n" ); document.write( "\n" ); document.write( "We have these input values
\n" ); document.write( "L = 156000
\n" ); document.write( "i = 0.04/12 = 0.00333333 approximately
\n" ); document.write( "n = 15*12 = 180 months\r
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\n" ); document.write( "\n" ); document.write( "Let's compute the value of P.
\n" ); document.write( "P = (L*i)/( 1 - (1+i)^(-n) )
\n" ); document.write( "P = (156000*0.00333333)/( 1 - (1+0.00333333)^(-180) )
\n" ); document.write( "P = 1153.91285124951
\n" ); document.write( "P = 1153.91\r
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\n" ); document.write( "\n" ); document.write( "Answer: The monthly payment is $1153.91\r
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\n" ); document.write( "\n" ); document.write( "As verification, you can use the calculator the tutor @Theo mentioned.
\n" ); document.write( "Keep in mind the answer is 1153.91 and NOT 1531.91; it appears he mixed up the digits.\r
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\n" ); document.write( "\n" ); document.write( "Another TVM solver is this one here
\n" ); document.write( "https://www.geogebra.org/m/mvv2nus2
\n" ); document.write( "which emulates the TVM solver in a TI83 and TI84.\r
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\n" ); document.write( "\n" ); document.write( "The inputs will be:
\n" ); document.write( "N = 180
\n" ); document.write( "I% = 4
\n" ); document.write( "PV = 156000
\n" ); document.write( "PMT = left blank or set to whatever you want
\n" ); document.write( "FV = 0
\n" ); document.write( "P/Y = 12
\n" ); document.write( "C/Y = 12
\n" ); document.write( "Do not type in dollar signs or commas into any of the boxes.
\n" ); document.write( "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.
\n" ); document.write( "This value is negative to represent a cash outflow.
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