The purchase price of a home is $159,000.00 and the 30-year mortgage has a 20% down payment and an annual interest rate of 4.4%. What is the monthly mortgage payment? Enter your answer as a dollar value, such as 3456.78

Answer: The monthly mortgage payment is $640

Step-by-step explanation:

The cost of the house is $159,000

The down payment made is 20%. This means that the amount paid as down payment is

20/100 * 159000 = 31800

The balance to be paid would be

159000 - 31800 = $127200

We would apply the periodic interest rate formula which is expressed as

P = a/[{ (1+r) ^n]-1}/{r (1+r) ^n}]

Where

P represents the monthly payments.

a represents the amount of the loan

r represents the annual rate.

n represents number of monthly payments. Therefore

a = $127200

r = 0.044/12 = 0.0037

n = 12 * 30 = 360

Therefore,

P = 127200/[{ (1+0.0037) ^360]-1}/{0.0037 (1+0.0037) ^360}]

P = 127200/[{ (1.0037) ^360]-1}/{0.0037 (1.0037) ^360}]

P = 127200/{3.779 - 1}/[0.0037 (3.779) ]

P = 127200 / (2.779/0.0139823)

P = 127200/198.75127840198

P = $640