A mortgage of $112,000 with a monthly payment of $727.09 has what length of original term?

A mortgage of $112,000 with a monthly payment of $727.09 has what length of original term?

• A. 20 years
• B. 22 years
• C. 27 years
• D. 29 years

Answer: (C)

To determine the original term of a mortgage, we can use the fixed-rate mortgage formula, which relates mortgage principal, monthly payment, interest rate, and the number of payments. The formula for a monthly payment can be expressed as: \[ M = P \cdot \frac{r(1 + r)^n}{(1 + r)^n - 1} \] Where: - \( M \) is the monthly payment. - \( P \) is the principal amount (the amount borrowed). - \( r \) is the monthly interest rate (annual interest rate divided by 12). - \( n \) is the number of payments (months). Given the principal (mortgage amount) of $112,000 and a monthly payment of $727.09, we can rearrange this formula to solve for \( n \) once we have the interest rate. Although the interest rate is not explicitly provided in this problem, a typical calculation would involve assuming a standard interest rate prevalent within the period of the mortgage. Testing common interest rates, one can find the number of months \( n \) that would result in a monthly payment close to $727.09. In instances where the interest rate is around 4.5

To determine the original term of a mortgage, we can use the fixed-rate mortgage formula, which relates mortgage principal, monthly payment, interest rate, and the number of payments. The formula for a monthly payment can be expressed as:

[ M = P \cdot \frac{r(1 + r)^n}{(1 + r)^n - 1} ]

Where:

• ( M ) is the monthly payment.

• ( P ) is the principal amount (the amount borrowed).

• ( r ) is the monthly interest rate (annual interest rate divided by 12).

• ( n ) is the number of payments (months).

Given the principal (mortgage amount) of $112,000 and a monthly payment of $727.09, we can rearrange this formula to solve for ( n ) once we have the interest rate.

Although the interest rate is not explicitly provided in this problem, a typical calculation would involve assuming a standard interest rate prevalent within the period of the mortgage. Testing common interest rates, one can find the number of months ( n ) that would result in a monthly payment close to $727.09.

In instances where the interest rate is around 4.5