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  • Question 4

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    Edwin Otieno
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    This document shows the calculation of the monthly payment for a $1.7 million property with a 15% down payment and 6% annual interest rate paid over 12 months. It determines the amount financed is $1,445,000 after subtracting the 15% down payment from the sales price. It then uses the finance amount, monthly interest rate of 0.5%, and number of payments in a standard monthly payment formula to calculate the monthly payment is $126,520.69.

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    This document shows the calculation of the monthly payment for a $1.7 million property with a 15% down payment and 6% annual interest rate paid over 12 months. It determines the amount financed is $1,445,000 after subtracting the 15% down payment from the sales price. It then uses the finance amount, monthly interest rate of 0.5%, and number of payments in a standard monthly payment formula to calculate the monthly payment is $126,520.69.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    8 views1 page

    Question 4

    Uploaded by

    Edwin Otieno
    This document shows the calculation of the monthly payment for a $1.7 million property with a 15% down payment and 6% annual interest rate paid over 12 months. It determines the amount financed is $1,445,000 after subtracting the 15% down payment from the sales price. It then uses the finance amount, monthly interest rate of 0.5%, and number of payments in a standard monthly payment formula to calculate the monthly payment is $126,520.69.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    Question 4:

    Amount financed = Sales price - Down payment


    Amount financed = $1,700,000 - (15% x $1,700,000)
    Amount financed = $1,445,000
    Interest rate per month = 6% / 12 = 0.005
    Monthly payment = (P x r) / (1 - (1 + r)^(-n))
    Where:
    P = Amount financed
    r = Interest rate per month
    n = Number of payments (12)
    Monthly payment = ($1,445,000 x 0.005) / (1 - (1 + 0.005)^(-12))
    Monthly payment = $126,520.69

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