Math Help Desperate

[Nebula]

OK... So I have a math problem I have been struggling with for literally 4 days. Maybe SOMEONE can help!!!


The price of a home is $80,000. The bank requires a 10% down payment. The cost of the home is financed with a 15 year fixed-rate mortgage at 4%. Find the monthly payment.

I know the down payment is $8,000, which leaves $72,000 to be mortgaged/financed. 4 % interest becomes .04.

It is a monthly payment over 15 years, so that means there is a total of 180 payments (12 x 15)

Problem is, in working everything out, I get $416 as the monthly payment, the answer though is $532.58 (it is in the back of the book, I just have to "show my work for credit" .

Can anyone help me??

Thank you so much!!!!

Mel

[VTMom]

I just googled "how to calculate mortgage payments" and wikihow had the equation with an example. It's more complicated than rate X principal.

http://www.wikihow.com/Calculate-Mortgage-Payments

[spinnymarie]

Yeah I think it has to do with compounded interest. But I have no help aside from that!

[Angelsj]

I keep getting closer to $519 so I am not sure how they get that answer.

[Lucy]

Google "mortgage calculator". Almost every realty website has one. Some require more info to be input than others, so just search till you get one that fits your situation.

Here's one: http://www.mortgagecalculator.org/ It comes up with $532 for the numbers you mentioned.

ETA: I guess I should have read your ENTIRE post!! I thought you were just trying to get a monthly payment amount for a house you were looking at buying! I didn't realize this was for a class. LOL.... silly me.

I have no idea how to figure it. Sorry.

[crunchymama]

This website may help http://www.wikihow.com/Calculate-Mortgage-Payments


M is your monthly payment
P is your principal 72,000
i is your monthly interest which is 0.04/12 or to simplify 0.0033333333333333
n is number of payments so 180

Solve for M

M = P[i(1+i)^n]/[(1+i)^n -1]

M = 72,000[0.003333333333(1+0.003333333333)^180]/[(1+0.0033333333)^180 -1]

M = 72,000[0.0033333333(1.003333333333)^180]/[(1.003333333333)^180 -1]

M = 72,000[0.00333333333333(1.82030162737)]/[(1.82030162737) -1]


M = 72,000[0.00606767209/0.82030162737]


M = 72,000[0.007396879254590]

M = 532.575063 or $532.58

[Sunshine74]

:hug: Sorry, no advice, I wouldn't even know how to begin that problem. Math is most definitely not my strong suit. But I just wanted to give you my support. You can do it! happyface

[Angelsj]

This website may help http://www.wikihow.com/Calculate-Mortgage-Payments


M is your monthly payment
P is your principal 72,000
i is your monthly interest which is 0.04/12 or to simplify 0.0033333333333333
n is number of payments so 180

Solve for M

M = P[i(1+i)^n]/[(1+i)^n -1]

M = 72,000[0.003333333333(1+0.003333333333)^180]/[(1+0.0033333333)^180 -1]

M = 72,000[0.0033333333(1.003333333333)^180]/[(1.003333333333)^180 -1]

M = 72,000[0.00333333333333(1.82030162737)]/[(1.82030162737) -1]


M = 72,000[0.00606767209/0.82030162737]


M = 72,000[0.007396879254590]

M = 532.575063 or $532.58

Wow, keep ALL the decimal places...
Must make a difference, because cutting any of that off early gets you a much lower number.