The condominium at the beach that you want to buy costs $249,500. You plan to make a cash down payment of 20 percent and finance the balance over 10 years at 6.75 percent.

What will be the amount of your monthly mortgage payment?

Complete question:

The condominium at the beach that you want to buy costs $249,500. You plan to make a cash down payment of 20 percent and finance the balance over 10 years at 6.75 percent. What will be the amount of your monthly mortgage payment?

a. $2,291.89

b. $2,809.10

c. $3,287.46

d. $3,412.67

e. $4,145.68

Answer:

$2,291.89 will be the amount of your monthly mortgage payment

Solution:

A mortgage interest is considered the principal balance.

Every month you spend a portion of your monthly mortgage payment in order to pay off another principal or mortgages debt and a portion of the monthly payments will be charged into interest on the loan.

249500 x 20% = 49900

Amount financed = 249500-49900 = 199,600

Enter 10*12 6.75/12 199,600 0

N I/Y PV PMT FV

-2,291.89