Charles and Cynthia are purchasing a house. They obtained a 30-year, $535,000 mortgage at an annual interest rate of 3.6% compounded

monthly.

Calculate their monthly payment on the loan. Round your answer to the nearest cent.

M

P

() (1 + 5) 121

= (1 + £2) 12 + -

Their monthly payment will be $

Answer:$4,369.17

Step-by-step explanation:

Compound interest (A) = P (1 + r/n) ^not

A = compound interest

P = principal

r = rate

n = number of times the interest is compounded in a year

t = Time

From our data,

R = 3.6%

T = 30 years

P = $535000

n = 12

A = 535000 (1 + 0.036/12) ^12*30

A = 535000*2.94

A = $1,572,900

In 30 years, we have (30*12) number of months = 360 months

To get the amount paid monthly, we divide the compound interest by the total number of months they'll repay the loan

Monthly payment = $1,572900/360 = $4,369.17