finding monthly mortgage payment??

Question

What is teh monthly mortgage payment for a mortgage of $230000 at 5.5% per annum, amortized over 20 years.

the equation says...
Monthly mortgage = units of thousands x rate per thousand

so i tried to put these together and i came out with

monthly mortgage = (230000/1000) x rate per thousand

how do i find the rate per thousand??

Answer 1

I would guess you were given a table of monthly payments at 5.5% per $1000.

The monthly P&I payment would be $1,582.14. If you are interested in the formula to calculate the payment-

Let P = mortgage amount
Let r = rate per period (month in the case ; 0.055/12)=0.00458333...
Let n = number of periods (months; 240 in this case)

Let X = (((1-(1+r)^-n)/r)
Payment = P / X

X = (((1-(1.00458333..)^-240)/0.00458333..)
X= ((1-0.333708693)/0.00458333..)
X= 145.3726487
The payment per $1000 would be $1000/145.3726487=$6.878873
The Payment for $230,000 would be 230 x 6.878873 = $1582.14
The Payment for $230,000 would be $230,000 / 145.3726487 = $1582.14

Answer 2

Don't know what the rate per thousand is supposed to be -- you have the book. But my TI-83 tells me your mortgage payment will be 1582.14.

Answer 3

The answer is $1582.14. You can easily do this in Excel with the PMT function.

Answer 4

sure