contestada

Clark and Lindsay Banks have agreed to purchase a home for $225,000. They made a down payment of 15%. They have obtained a mortgage loan at a 6.5% annual interest rate for 25 years. What is the mortgage total if they finance the closing costs?

Respuesta :

SOLUTION

We will be using the annual compound interest formula to solve this question.

[tex]\begin{gathered} A=P(1+\frac{R}{100})^{mn} \\ \text{where m=1, n=25years, R=6.5,} \end{gathered}[/tex]

After a down payment of 0.15 x $225,000 = $33750

The principal value will be $225,000 - $33750 = $191250

Put all these values into the compound interest formula above,

we will have:

[tex]\begin{gathered} A=191250(1+\frac{6.5}{100})^{1\times25} \\ A=191250(1+0.065)^{25} \end{gathered}[/tex][tex]\begin{gathered} A=191250(1.065)^{25} \\ \text{ = 191250}\times4.8277 \\ \text{ =923,297.63} \end{gathered}[/tex]

The mortgage total if they finance the closing costs will be:

$923,297.63

Otras preguntas