Question

The price of a home is $300,000. After a 10% down payment, the mortgage is $270,000. If this is financed with a 30-year fixed-rate mortgage at 6%, what is the monthly payment, excluding escrow taxes and insurance?

Round your answer to the nearest cent.
Do NOT round until you have calculated the final answer.

Answer 1

Answer: 1618.79

Work Shown:

P = (L*i)/( 1 - (1+i)^(-n) )

P = (270000*0.005)/( 1 - (1+0.005)^(-360) )

P = 1618.78641791244 approximately

P = 1618.79

Notes:

• L = 270000 = loan amount
• i = 0.06/12 = 0.005 = monthly interest rate in decimal form
• n = 30*12 = 360 = number of months
• The down payment is ignored.
• There are many online monthly payment calculators that can be used to verify the answer.