You want to purchase a new condominium that costs $287,500. Your plan is to pay 25 percent down in cash and finance the balance over 15 years at 3.75 percent. What will be your monthly mortgage payment including principal and interest

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Dorian Horne

27 April, 14:56

You want to purchase a new condominium that costs $287,500. Your plan is to pay 25 percent down in cash and finance the balance over 15 years at 3.75 percent. What will be your monthly mortgage payment including principal and interest

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Jeremy Orr · Answer 1

The monthly payment is $1,568.07

Explanation:

The amount required to purchase the condominium is $287,500, however the amount of finance required is : $287,500 - ($287,500*25%) = $215,625.00

The monthly mortgage payment required can be computed using the pmt formula in excel"

=pmt (rate, nper,-pv, fv)

rate is the payable on the mortgage on monthly basis which is 3.75%/12=0.003125

nper is the number of years of mortgage multiplied by 12 months since 12 monthly repayments are required in a year i. e 15*12=180

pv is the actual mortgage value is $215,625

fv is the future value of the mortgage and it is unknown

=pmt (0.003125,180,-215625,0)

pmt=$1,568.07