Question

The Payans have just learned that the bank will approve them for a mortgage at an APR of 4.3% for 30 years if they meet the back-end ratio needs to be calculated with the actually monthly payment. Use this monthly payment formula to calculate the Payans' monthly mortgage

Answer 1

Assuming the principal amount of money is $250,00, we can substitute in the equation:

principal= $250,000

interest= 0.043

t=30 years,

then:

`\begin{gathered} M=(250,000((0.043)/(12))(1+(0.043)/(12))^(12\cdot30))/((1+(0.043)/(12))^(12\cdot30)-1) \\ M=1,237.178 \\ \text{rounding to: 1,237.18} \end{gathered}`