Respuesta :
Answer:
The monthly payment will be of $11,485.37
Step-by-step explanation:
Compound interest:
The compound interest formula is given by:
[tex]A(t) = P(1 + \frac{r}{n})^{nt}[/tex]
Where A(t) is the amount of money after t years, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per year and t is the time in years for which the money is invested or borrowed.
A home is purchased for $ 794,000 with a 16% down payment.
So the value of the loan, that is, the amount subject to interest, will be given by:
[tex]P = (1-0.16)*794000 = 0.84*794000 = 666960[/tex]
How much will the interest accumulate to?
7.22% of interest means that [tex]r = 0.0722[/tex]
19 means means that [tex]t = 19[/tex]
Monthly means that [tex]n = 12[/tex]
So
[tex]A(t) = P(1 + \frac{r}{n})^{nt}[/tex]
[tex]A(t) = 666960(1 + \frac{0.0722}{12})^{12*19}[/tex]
[tex]A(t) = 2618664.5[/tex]
Monthly payment:
2618664.5 divided in 19*12 payments. So
2618664.5/(19*12) = 11485.37
The monthly payment will be of $11,485.37
