What are the monthly payments on a $950,000 mortgage at 4.8% interest for 15 years?

What are the monthly payments on a $950,000 mortgage at 4.8% interest for 15 years?

• A. $6,903.59
• B. $7,524.34
• C. $7,413.94
• D. $9,292.05

Answer: (C)

To determine the monthly payments on a mortgage, we can use the formula for the monthly payment on an amortizing loan, which is: \[ M = P \frac{r(1 + r)^n}{(1 + r)^n - 1} \] where: - \(M\) is the total monthly mortgage payment, - \(P\) is the principal loan amount, - \(r\) is the monthly interest rate (annual rate divided by 12), - \(n\) is the number of payments (loan term in months). For this scenario: - The principal \(P\) is $950,000. - The annual interest rate is 4.8%, so the monthly interest rate \(r\) would be \(0.048 / 12 = 0.004\). - The loan term of 15 years translates to \(n = 15 \times 12 = 180\) months. Substituting these values into the formula, we get: \[ M = 950000 \cdot \frac{0.004(1 + 0.004)^{180}}{(1 + 0.004)^{180} - 1} \]

To determine the monthly payments on a mortgage, we can use the formula for the monthly payment on an amortizing loan, which is:

[

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

]

where:

• (M) is the total monthly mortgage payment,

• (P) is the principal loan amount,

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

• (n) is the number of payments (loan term in months).

For this scenario:

• The principal (P) is $950,000.

• The annual interest rate is 4.8%, so the monthly interest rate (r) would be (0.048 / 12 = 0.004).

• The loan term of 15 years translates to (n = 15 \times 12 = 180) months.

Substituting these values into the formula, we get:

[

M = 950000 \cdot \frac{0.004(1 + 0.004)^{180}}{(1 + 0.004)^{180} - 1}

]