You plan to buy a $127,242 house. You have $30,313 to use as the down payment. The bank offers to loan you the remainder at 18% nominal interest compounded monthly. The term of the loan is 20 years. What is your equal monthly loan payment

$1,495.92

Explanation:

The amount you plan to borrow from the bank is:

= Cost of house - down payment

= 127,242 - 30,313

= $96,929

The amount to be paid is constant and so is an annuity. The loan amount is the present value of this annuity.

Term = 20 * 12 = 240 months

Interest = 18% / 12 = 1.5% monthly

Present value of annuity = Annuity * ( 1 - (1 + rate) ^-number of periods) / rate

96,929 = Annuity * (1 - (1 + 1.5%) ⁻²⁴⁰) / 1.5%

96,929 = Annuity * 64.79573209

Annuity = 96,929 / 64.79573209

= $1,495.92

the answer to this question would be shared investment