Aloan was assumed for fifty thousand dollars with a down payment of 15%.
The loan balance is payable at the rate of $7.50 per thousand per month which also includes an annual interest payment at 5.5%.
What are the monthly payments ?
The answers along with the solutions are posted below the wildlife photos. Please take your time.
Let's find out what the downpayment at 15% of 50000 is by multiplying .15 times 50000 and we see that we have a $7500 downpayment.
Now let's subtract the downpayment of $7500 from $50000 and we see that we have a loan balance of $42,500.
If we're borrowing $42,500 at a 5.5% annual interest rate let's find out what the annual interest payment is by multiplying the apr of 5.5% or .055 times the loan amount of $42,500, and we see that we have an annual interest payment of $2337.50.
Now let's break the annual interst payment down into twelve monthly interest payments by dividing $2337.50 by twelve and we find that the monthly interest payments are $194.791667 or rounded $194.80.
If the monthly payment includes a fee of 7.50 per thousand dollars of the loan amount let's divide the loan amountof 42500 by 1000 and we find that we now have 42.5.
Multiply 42.5 times 7.5 and we now have a monthly payment of $318.75. This includes the annual interest payment if you read the question.
We don't add the $318.75 to the annual monthly interest of $194.80 to get $513.55, which is what you probably thought it be !
Pretty heavy, eh ?