Question

Find the total monthly payment for a $205.00 mortgage loan at 5.25% for 20 years. The assessed value of the home is $240,000. The annual taxes on the home are 1.25% of the assessed value, and the insurance on the home costs $450 per year

Answer 1

*** $205.00 mortgage***

is that a typo ? is it 205,000

or is it a monthly payment ?

Answer 2

oops its $205,000

Answer 3

@phi I corrected it its $205,000

Answer 4

ok. we need the formula to find the monthly payment. do you know it?

Answer 5

I don't think so

Answer 6

M = P(1+r)n r / [(1+r)n-1]
is it this formula

Answer 7

yes that looks like it.

We need to replace the letters with numbers (from the problem)
r is the monthly interest rate (divide the given rate by 12)

Answer 8

can you figure out what numbers to use in that formula ?

Answer 9

I don't know I do know the payment is one number but cant think of the rest

Answer 10

payment is what we are trying to find (they call it M)

n is the number of payments. if you have a loan for 20 years, and 1 payment per month, any idea how many payments that is ?

Answer 11

no idea

Answer 12

what if the loan was for 1 year and you paid one per month ? how many payments is that ?

Answer 13

I am clueless

Answer 14

Here's the formula:

Answer 15

how do I plug the numbers in?

Answer 16

It seems I worked on a similar problem a little while ago.
It seems we first have to calculate the taxes and insurance and add those into the mortgage total.