Question

If a home mortgage has a term of 15 years and a payment of $1,000, what is the loan amount? (assume that there are no interest-free mortgages)

a. $180,000
b. Less than $180,000
c. $200,000
d. $360,000

Answer 1

Since the payment is $ 1000 per month for 15 years and there are no interest-free mortgages. So the loan amount can be solve easily by multiplying the payment by the number of payment per year and for how many years T = (1000 / month) (12 month / year) ( 15 years) T = $180000