   Chapter 13.4, Problem 18E ### Algebra and Trigonometry (MindTap ...

4th Edition
James Stewart + 2 others
ISBN: 9781305071742

#### Solutions

Chapter
Section ### Algebra and Trigonometry (MindTap ...

4th Edition
James Stewart + 2 others
ISBN: 9781305071742
Textbook Problem

# Mortgage What is the monthly payment on a 15 - y e a r mortgage of $200 , 000 at 6 % interest? What is the total amount paid on this loan over the 15 - y e a r period? To determine To find: The monthly payment on a 15-year mortgage of$200,000 at 6% interest per year, compounded monthly and the total amount paid on this loan over the 15-year period.

Explanation

Given:

The interest rate per year is given by,

i=6%

Amount of loan is Ap=\$200,000.

Period of payment is 15 years.

Approach:

If a loan Ap is to be repaid in n regular equal payments with interest rate i per time period, then the size R of each payment is given by,

R=iAp1(1+i)n(1)

The total amount paid on the loan is calculated as,

Amount of a monthly payment × total number of monthly payments.

Calculation:

For calculating monthly payments,

The number of regular equal payments is given by,

n=15×12=180

The interest rate is given by,

i=0.0612=0

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