Answer:
* The monthly mortgage payment is $629.53 ⇒ answer C
Step-by-step explanation:
* Lets explain how to solve the problem
- Leila is considering buying her first home
- The house she is interested in buying is priced at $125,000
∴ She can put $20000 down payment
* Lets find the balance to be paid off on mortgage
∴ The balance = 125000 - 20000 = 105000
- She qualifies for a 30-year mortgage at 6%
* Lets find the rule of the monthly payment
∵ [tex]pmt=\frac{\frac{r}{n}[P(1+\frac{r}{n})^{tn}]}{(1+\frac{r}{n})^{tn}-1}[/tex] , where
- pmt is the monthly mortgage payment
- P = the initial amount
- r = the annual interest rate (decimal)
- n = the number of times that interest is compounded per unit t
- t = the time the money is invested or borrowed for
∵ P = 105000
∵ r = 6/100 = 0.06
∵ n = 12
∵ t = 30
∴ [tex]pmt=\frac{\frac{0.06}{12}[105000(1+\frac{0.06}{12})^{30(12)}}{(1+\frac{0.06}{12})^{30(12)}-1}[/tex]
∴ [tex]pmt=\frac{0.005[105000(1.005)^{360}]}{(1.005)^{360}-1} =629.528[/tex]
* The monthly mortgage payment is $629.53
