Alma took out an 80/20 mortgage to buy a house costing $175,000. The first

(80%) mortgage has an interest rate of 4.75%, and the second (20%)

mortgage has an interest rate of 7.525%. Both the first mortgage and the

second mortgage are 30-year fixed-rate mortgages. What is her monthly

payment on the first mortgage?

Answer: $729.508

Step-by-step explanation:

The principle amount is $175000

80% of 175000 = 80/100 * 175000

= 0.8 * 175000

= 140000

The formula is:

p * r * (1 + r) ^n / (1 + r) ^n - 1

For 1st part:

p = 140000

r = 4.75 : 12 : 100=0.00395

n = 12 * 30 = 360

Putting the values in formula we get

140000*0.00395 * (1.00395) ^360 / (1.00395) ^360-1

= $729.508

Monthly payment on the first mortgage is $729.508