Answer:
The monthly payment is $3583.63 ( approx )
Step-by-step explanation:
Given,
The total cost of the home = $1,250,000
There is a downpayment of $400,000,
Thus, the present value of the loan, PV = 1250000 - 400,000 = $ 850,000
Annual rate = 3 % = 0.03,
So, the monthly rate, r = [tex]\frac{0.03}{12}=\frac{1}{400}[/tex]
And, time ( in years ) = 30
So, the number of months, n = 12 × 30 = 360
Hence, the monthly payment of the loan,
[tex]P=\frac{PV(r)}{1-(1+r)^{-n}}[/tex]
[tex]=\frac{850000(\frac{1}{400})}{1-(1+\frac{1}{400})^{-360}}[/tex]
[tex]=3583.6342867[/tex]
[tex]\approx \$3583.63[/tex]
