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16 May, 19:59

John bought a new house. He made a $5,500 down payment and financed the rest, $220,000, through his credit union. The credit union charged him 10% per year compounded monthly for 20 years. How much were his monthly payments?

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  1. 16 May, 20:20
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    Total Amount: $ 1,612,176.2, after 1st month he is supposed to pay $221833.3, after 2nd month his amount becomes $223681.94

    Explanation:

    Amount=P (1+r/n) ^nt

    P: principal

    r: interest rate

    n: number of compoundings

    t: number of years

    A = 220,000 * (1+0.1/12) ^ (12*20)

    A = $ 1,612,176.2

    After 1st Month

    A = P + P*r*t

    A = 220000 + 220000*0.1*1/12

    A = $ 221833.33

    For 2nd month, P = 221833.33

    A = 221833.3+221833.3*0.1*1/12

    A=$ 223,681.94
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