Joe Chin bought a house for $180,000. He made a 20% down payment. Joe secured a loan for the balance of the purchase price at 6.5% interest for 30 years. What will be the monthly payments on the loan? (do not use commas or dollar signs in your answer)

910.18

Explanation:

After Chin's down payment the amount borrowed is ...

(1 - 20%) ($180,000) = 0.80·$180,000 = $144,000

The amount of the payment is given by the amortization formula ...

A = P (r/n) / (1 - (1 + r/n) ^ (-nt))

for P borrowed at rate r for t years, compounded n times per year.

A = 144000 (0.065/12) / (1 - (1 +.065/12) ^ (-12·30)) = 910.18

The monthly loan payments will be 910.18.