Question

You bought a house worth $900,000 and the loan is a 30-year fixed rate mortgage with 4.5% annual interest rate. What is your monthly payment?

Your monthly payment is $__________. (Round to the nearest dollar.)

Answer 1

Formula for monthly payment or EMI (equated monthly installment) = (P X R X (1+R)^N) / (1+R)^N-1), where P is loan amount, R is interest rate per month and N is number of monthly installment

EMI = (900000 X 4.5%/12 X (1+4.5%)^360 / (1+4.5%)^360-1)

# Period of loan is 30 years, when converted into months it is 360 months (30 X 12)

EMI = $ 4560