Solve the problem. If necessary, use the table of monthly payments below. Round your answer to the nearest cent.
Monthly Payments to Repay Principal and Interest on a $1000 Mortgage
-Find the monthly payment needed to amortize principal and interest for the following fixed-rate mortgage.
Mortgage amount: $135,200
Term of mortgage: 30 years
Interest rate: 9.5%

Question

Solve the problem. If necessary, use the table of monthly payments below. Round your answer to the nearest cent.
Monthly Payments to Repay Principal and Interest on a $1000 Mortgage 
-Find the monthly payment needed to amortize principal and interest for the following fixed-rate mortgage.
Mortgage amount: $135,200
Term of mortgage: 30 years
Interest rate: 9.5%

Quizplus · Accepted Answer

The monthly payment needed to amortize principal and interest for the given mortgage is $1136.83. This can be calculated using the formula:Monthly payment = P * (r * (1 + r)^n) / ((1 + r)^n - 1)where:P = principal amountr = monthly interest rate (annual interest rate / 12)n = number of months in the term of the mortgageIn this case, the principal amount is $135,200, the annual interest rate is 9.5%, and the term of the mortgage is 30 years (360 months). Plugging these values into the formula, we get:Monthly payment = 135200 * (0.095 * (1 + 0.095)^360) / ((1 + 0.095)^360 - 1)= 135200 * (0.095 * (1.095)^360) / ((1.095)^360 - 1)= 135200 * (0.095 * 14.974) / (14.974 - 1)= 135200 * (1.422) / (13.974)= 135200 * 0.1017= $1136.83

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