Question

Your monthly mortgage payment on your house is $593.90. It is a 30 year mortgage at 7.8% compounded monthly. How much did you borrow

Answer 1

Answer:

The amount borrowed is $82,500

Explanation:

The computation of the amount borrowed is shown below:

But before that we do the following calculations

Total Periods is

= 30 × 12

= 360

Interest Rate = 7.8% ÷ 12 = 0.65%

Now

Amount Borrowed is

= $593.90 ×  (PVA $1 for 360 Periods at 0.65%)

= $593.90 × (138.913874 )

= $82,500

Hence the amount borrowed is $82,500