Problema Solution
If you buy a $300,000 house, paying 5% down, and take out a 30 year loan, fixed rate of 6.5%, then your monthly payments for priciple and interest will be
Answer provided by our tutors
Loan = $300,000(1-5%) = $285,000
Period = 360 months
Rate = 6.5%/12 = 0.54%
Monthly payment = $285,000*0.54%*(1+0.54%)^360/[(1+0.54%)^360 -1] = $1801.39
Interest = 360*$1801.39 - $285,000 = $363501.79
So Monthly payment is $1801.39, interest is $363501.79