Martha is buying a house for $107,820. She is making 15 percent down payment and financing the remainder at 6.5 percent for 25 years. What are Martha's monthly
Mathematics
Bbgjazzybaby
Question
Martha is buying a house for $107,820. She is making 15 percent down payment and financing the remainder at 6.5 percent for 25 years. What are Martha's monthly payments?
2 Answer

1. User Answers cm10792
$91,647 would be the answer 
2. User Answers parmesanchilliwack
Answer:
The monthly payment is $ 618.81 ( approx )
Stepbystep explanation:
Here,
The price of house = $ 107,820,
Down payment percentage = 15 %,
So, the down payment = 15 % of $ 107,820
[tex]=\frac{15\times 107820}{100}[/tex]
[tex]=\frac{1617300}{100}[/tex]
= $ 16,173
Thus, the principal amount of loan, P.V. = The price of house  the down payment
= $ 107,820  $ 16,173
= $ 91647
Now, the annual rate = 6.5 % = 0.065
⇒ The rate per month, r = [tex]\frac{0.065}{12}[/tex]
Time, n = 25 years = 300 months,
Hence, the monthly payment of the loan is,
[tex]P=\frac{P.V.(r)}{1(1+r)^{n}}[/tex]
[tex]=\frac{91647(\frac{0.065}{12})}{1(1+\frac{0.065}{12})^{300}}[/tex]
[tex]=\$ 618.80710716\approx \$ 618.81[/tex]