Ms. Finch paid a 10% downpayment of $200,000 for a house and lot and agreed to pay the balance on monthly ins?

Question

Ms. Finch paid a 10% downpayment of $200,000 for a house and lot and agreed to pay the balance on monthly installments for 5 years at an interest rate of 15% compounded monthly. What is the monthly installment in in dollars? can you please give me the formula and solution to this problem...what is the formula used here?

Answer 1

180,000 is to be financed, so
180,000 =X * [(1 - (1/(1+.15/12)^60)]/.15/12,
where X is the monthly payment 60 is the number of months, and .15/12 - .0125 = monthy interest rate.
X = 180000/(.52543/.0125) = $4,282.19

Note that another answer tried a simpler approach, and by neglecting the monthly compounding, calculated a payment that was too small.

Answer 2

5 years at an interest rate of 15% compounded monthly.
MONTHLY????
On a simple interest rate that's 15% X 12. HUH?
Holy Shi*
And she made a downpayment of $200,000.00, which you say is 10% of the total price.

That makes the total cost of the house $2,000,000.00, leaving a balance to be financed $1,800,000.00.

Please restate this. Can't be correct.

If you have and understand Excel, there is an amortization function there, but I'm not sure you'll find one to do what you stated.

Answer 3

Amount to be amortized (x):
x = ($200,000 / 10%) - (10% * [$200,000 / 10%])
x = $2,000,000 - (10% * $200,000)
x = $2,000,000 - $200,000
x = $1,800,000

= PMT(0.15/12,5*12,-1800000)
= 42,821.87

Answer: $42,821.87 is the monthly amortization at 1 1/4% (15%/12) for 60 months (5 * 12).

Answer 4

ok first you say 200,000 -10% down payment (200,000*.10=20,000)

200,000-20,000=180,000 (balance due on house)

15% interest rate added to 180,000

180,000*.15=27,000
180,000+27,000=207,000 (amount plus interest)

207,000/5 (years) =41,400 per year

41,400/12=3,450

So the payment would be 3,450 per month.