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7 September, 12:36

Paula purchased a house for $300,000. After providing a 20% down payment, she borrowed the balance from the local savings and loan under a 30-year 6% mortgage loan requiring equal monthly installments at the end of each month. Which time value concept would be used to determine the monthly payment

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  1. 7 September, 13:50
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    The concept of EMI i. e. Equal monthly installments will be used.

    Explanation:

    Given that:

    Purchase amount of house = $3,00,000

    Down payment made = 20% of 3,00,000 = $60,000

    Balance amount = $2,40,000

    Therefore, to determine the monthly payment the concept of Equal monthly installment will be used.
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