Explanation Given: Principal of loan P = $ 175 , 000 and rate of interest is 6.24% compounded monthly for 30 years. Explanation: Use the formula for the amortization of payments: R = P i 1 − ( 1 + i ) − n Here, P is the principal of loan, R is the periodic payment, i is the interest rate per period, and n is the number of periods. As the loan is for 30 years, n = 12 × 30 = 360 The interest rate per period will be i = 1 12 × 6.24 % = 1 12 × 0.0624 = 0.0052 Substitute P = $ 175 , 000 , i = 0.0052 , and n = 360 .The value of each monthly payment will be R = P i 1 − ( 1 + i ) − n = 175 , 000 × 0.0052 1 − ( 1 + 0

Finite Mathematics, Books a la Carte Plus MyLab Math Access Card Package (11th Edition)

11th Edition

ISBN: 9780133886818

Author: Margaret L. Lial, Raymond N. Greenwell, Nathan P. Ritchey

Publisher: PEARSON

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Chapter 5.3, Problem 28E

To determine

The monthly house payments necessary to amortize the given loan.

Total payments and the total amount of interest paid.

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Chapter 5.3, Problem 27E

Chapter 5.3, Problem 29E

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Chapter 5 Solutions

Finite Mathematics, Books a la Carte Plus MyLab Math Access Card Package (11th Edition)

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The monthly house payments necessary to amortize the given loan. Total payments and the total amount of interest paid.

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