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What is the monthly payment on a 20 year mortgage (rounded to the nearest dollar) with end of month payments when the annual interest rate is 8%, and we are borrowing $300,000?

Respuesta :

Answer:

PMT = $30555.68

Explanation:

given data

time = 20 year

annual interest rate = 8%

borrowing = $300,000

solution

we first get here Present Value Interest Factor of Annuity that is

Present Value Interest Factor of Annuity = [tex]\frac{1-(1+r)^{-t}}{r}[/tex]     ..............1

here r is rate and t is time

Present Value Interest Factor of Annuity = [tex]\frac{1-(1+0.08)^{-20}}{0.08}[/tex]

Present Value Interest Factor of Annuity  = 9.81814

so here PMT = [tex]\frac{borrow\ amount}{present\ value\ interest\ factor}[/tex]

PMT = [tex]\frac{300000}{9.81814}[/tex]

PMT = $30555.68

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