document.write( "Question 1204718: Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financing the rest at 8% interest for 30 years. How much money did you pay as your down payment?
\n" ); document.write( "How much money was your existing mortgage (loan) for?
\n" ); document.write( "What is your current monthly payment on your existing mortgage?Carry at least 4
\n" ); document.write( "decimal places during calculations, but round your final answer to the nearest cent.
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Algebra.Com's Answer #841162 by math_tutor2020(3817) $\"\"$ $\"About$

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\n" ); document.write( "Answers:
\n" ); document.write( "Down payment = $15,000
\n" ); document.write( "Loan amount = $135,000
\n" ); document.write( "Monthly payment = $990.58\r
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\n" ); document.write( "\n" ); document.write( "Work Shown\r
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\n" ); document.write( "\n" ); document.write( "down payment = 10% of home value
\n" ); document.write( "down payment = 10% of $150,000
\n" ); document.write( "down payment = 0.10*($150,000)
\n" ); document.write( "down payment = $15,000
\n" ); document.write( "Basically chop a 0 off at the end.\r
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\n" ); document.write( "\n" ); document.write( "loan amount = home value - down payment
\n" ); document.write( "loan amount = $150,000 - $15,000
\n" ); document.write( "loan amount = $135,000
\n" ); document.write( "Or
\n" ); document.write( "loan amount = 90% of home value
\n" ); document.write( "loan amount = 0.90*($150,000)
\n" ); document.write( "loan amount = $135,000
\n" ); document.write( "This is the starting balance of the mortgage.\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( "P = monthly payment
\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( "In this case
\n" ); document.write( "P = unknown = what we want to calculate
\n" ); document.write( "L = 135000
\n" ); document.write( "i = 0.08/12 = 0.00666667 approximately
\n" ); document.write( "n = 30*12 = 360 months\r
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\n" ); document.write( "\n" ); document.write( "P = (L*i)/( 1-(1+i)^(-n) )
\n" ); document.write( "P = (135000*0.00666667)/( 1-(1+0.00666667)^(-360) )
\n" ); document.write( "P = 990.582551181798
\n" ); document.write( "P = 990.58
\n" ); document.write( "Many online calculators such as this one
\n" ); document.write( "https://www.calculator.net/loan-calculator.html
\n" ); document.write( "can be used to verify the correct monthly payment.\r
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\n" ); document.write( "\n" ); document.write( "Here's what it looks like if we vary the precision on the value of 'i'
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# of decimal digits	i = monthly rate in decimal form	monthly payment
3	0.007	1028.48
4	0.0067	994.35
5	0.00667	990.96
6	0.006667	990.62
7	0.0066667	990.59
8	0.00666667	990.58
9	0.006666667	990.58
10	0.0066666667	990.58
11	0.00666666667	990.58
12	0.006666666667	990.58

\n" ); document.write( "As you can see, 4 decimal digits is not enough. We must use 8 decimal digits or more. Storing the value of i into the calculator will let the calculator handle the precision level.
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