What is the monthly payment on a 30-year mortgage of $100,000 at 8% interest per year, compounded monthly? What is the total amount paid on this loan over the 30-year period?

Algebra and Trigonometry (6th Edition)
6th Edition
ISBN:9780134463216
Author:Robert F. Blitzer
Publisher:Robert F. Blitzer
ChapterP: Prerequisites: Fundamental Concepts Of Algebra
Section: Chapter Questions
Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...
icon
Related questions
icon
Concept explainers
Topic Video
Question

What is the monthly payment on a 30-year mortgage of $100,000 at 8% interest per year, compounded monthly? What is the total amount paid on this loan over the 30-year period?

Expert Solution
Step 1 Given:

Present value: $100,000

Interest per year: 8%

Time: 30 years 

To find: Monthly payment and the total amount paid over 30-year period.

Step 2 Formula to compute present value:

PV=Pi1-1(1+i)n

, where P= payment per month, i=rate period, n =number of payments.

Here,

i=0.0812=1150

n=30×12=360

Step 3

Substitute all values in the formula, 

100000=P11501-11+1150360100000150=P1-115115036020003=0.90855662756PP=20003×0.90855662756=733.764573879$733.76

Hence, Monthly payment is $733.76

steps

Step by step

Solved in 5 steps

Blurred answer
Knowledge Booster
Application of Algebra
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, algebra and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Algebra and Trigonometry (6th Edition)
Algebra and Trigonometry (6th Edition)
Algebra
ISBN:
9780134463216
Author:
Robert F. Blitzer
Publisher:
PEARSON
Contemporary Abstract Algebra
Contemporary Abstract Algebra
Algebra
ISBN:
9781305657960
Author:
Joseph Gallian
Publisher:
Cengage Learning
Linear Algebra: A Modern Introduction
Linear Algebra: A Modern Introduction
Algebra
ISBN:
9781285463247
Author:
David Poole
Publisher:
Cengage Learning
Algebra And Trigonometry (11th Edition)
Algebra And Trigonometry (11th Edition)
Algebra
ISBN:
9780135163078
Author:
Michael Sullivan
Publisher:
PEARSON
Introduction to Linear Algebra, Fifth Edition
Introduction to Linear Algebra, Fifth Edition
Algebra
ISBN:
9780980232776
Author:
Gilbert Strang
Publisher:
Wellesley-Cambridge Press
College Algebra (Collegiate Math)
College Algebra (Collegiate Math)
Algebra
ISBN:
9780077836344
Author:
Julie Miller, Donna Gerken
Publisher:
McGraw-Hill Education