anna is buying a house selling for 185,000. to obtain the mortgage, anna is required to make a 20% down payment. anna obtains a 25-year mortgage with an interest rate of 6%. a) determine the amount of the required down payment b) determine the amount of the mortgage c) determine the monthly payment for principal and interest

a. The Amount of the required down payment is $37,000

b. The amount of the mortgage is $148,000

c. The monthly payment for principal and interest is $953.62 per month

Step-by-step explanation:

a) In order to calculate the Amount of the required down payment we would have to use the following formula:

Amount of down payment = Value of home x Required down payment percentage

= $185,000 x 20%

= $37,000

b) In order to calculate the Amount of the mortgage we would have to use the following formula:

Amount of the mortgage = Value of home - Down payment

= $185,000 - $37,000

= $148,000

c) Loan Amount (P) = $148,000

Monthly Interest Rate (n) = 0.5% per month [6.00% / 12 Months]

Number of months (n) = 300 Months [25 Years x 12 Months]

Therefore, the Monthly Loan Payment = [P x {r (1 + r) n} ] / [ (1 + r) n - 1]

= [$148,000 x {0.005 x (1 + 0.005) ∧300}] / [ (1 + 0.005) ∧300 - 1]

= [$148,000 x {0.005 x 4.464}] / [4.464 - 1]

= [$148,000 x 0.02232] / 3.464

= $3,303.36 / 3.464

= $953.62 per month

The monthly payment for principal and interest is $953.62 per month