SOLUTION: Find the monthly payment for the loan indicated. (Round your final answer to two decimal places. See Example 5.) To purchase a home, a family borrowed $87,000 at an annual interes

Algebra ->  Finance -> SOLUTION: Find the monthly payment for the loan indicated. (Round your final answer to two decimal places. See Example 5.) To purchase a home, a family borrowed $87,000 at an annual interes      Log On


   

Question 1194576: Find the monthly payment for the loan indicated. (Round your final answer to two decimal places. See Example 5.)
To purchase a home, a family borrowed $87,000 at an annual interest rate of 6.3% for 20 years.
$

Answer by MathLover1(20850) About Me  (Show Source):
You can put this solution on YOUR website!

buying price = 87000
interest rate = 6.3% = 0.063-> monthly interest rate= 0.063%2F12=0.00525
time = 20 years => 240 months (20+%2A+12)
let M be monthly payment

87000=%28M%2F0.00525%29%281-1%2F%281%2B0.00525%29%5E240%29

87000%2A0.00525=M%281-0.28459048383728347%29

456.75=M%280.71540951616271653%29

M=456.75%2F0.71540951616271653
M=638.4455192179948...Round to two decimal places

Monthly payment is M=638.45