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Question 20: Jim and Cathy have bought a $300,000 house. The interest is at 3.9%, paid...

Question 20:

Jim and Cathy have bought a $300,000 house. The interest is at 3.9%, paid monthly, and is a 20 year loan. They plan to borrow the entire $300,000 for the purchase. How much will their monthly payment be, excluding taxes and insurance?

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Answer #1

PVOrdinary Annuity = C*[(1-(1+i/100)^(-n))/(i/100)]
C = Cash flow per period
i = interest rate
n = number of payments
300000= Cash Flow*((1-(1+ 3.9/1200)^(-20*12))/(3.9/1200))
Cash Flow = 1802.17
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