Question

Sara buys a house for $290,000. She makes a 20% down payment and finances the balance with a 30-year fixed loan at 4.2% interest compounded monthly. Sara's monthly payment is:

Answer 1

Answer:

monthly payment=$322.52

Step-by-step explanation:

cost of house=$290,000

down payment= 20%

interest  monthly = 4.2%

interest rate compounded monthly so (i)=4.2/12=0.35%

months= $30\times 12$=360 months

down payment = $0.2\times 290000$

                         =$58000

amount to be paid(P)=$232,000

$P=R\frac{(1+r)^n-1}{i}\\232000=R\frac{(1+0.0035)^{360}-1}{0.0035}\\232000=R\times 719.33$

R=$322.52

sara's monthly payment will be $322.52