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You are thinking of purchasing a house. The house costs $ 200 comma 000$200,000. You have...

You are thinking of purchasing a house. The house costs $ 200 comma 000$200,000. You have $ 29 comma 000$29,000 in cash that you can use as a down payment on the​ house, but you need to borrow the rest of the purchase price. The bank is offering a 3030​-year mortgage that requires annual payments and has an interest rate of 6 %6% per year. What will be your annual payment if you sign this​ mortgage?

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Answer #1

Cost of the house= $200,000

Down payment as cash= $29,000

Amount required to be taken as a loan= $200,000- $29,000= $171,000

The annual payment required to be made on the bank loan is calculated using a financial calculator.

The below information has to be entered in a financial calculator:

PV= -171,000; N=30; I/Y= 8

Press CPT and PMT to calculate the annual payment on the loan.

The annual payment of the bank loan is $15,189.49.

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