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18 July, 15:31

Hugh akston took out a 30 year mortgage with an ear of 5.9%. if hugh borrowed $300,000 to buy his home, then his monthly payment will be closest to:

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  1. 18 July, 17:56
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    The formula of the present value of an annuity ordinary is

    Pv=pmt [ (1 - (1+r/k) ^ (-kn)) : (r/k) ]

    Pv present value 300000

    PMT monthly payment?

    R interest rate 0.059

    K compounded monthly 12 because the payments are monthly

    N time 30 years

    Solve the formula for PMT

    PMT=pv: [ (1 - (1+r/k) ^ (-kn)) : (r/k) ]

    PMT=300,000: ((1 - (1+0.059:12) ^ (

    -12*30)) : (0.059:12))

    =1,779.41
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