Kingston Development Corp. purchased a piece of property for $2.79 million. The

Question

Kingston Development Corp. purchased a piece of property for $2.79 million. The firm paid a down payment of 15 percent in cash and financed the balance. The loan terms require monthly payments for 15 years at an annual percentage rate of 7.75 percent, compounded monthly. What is the amount of each mortgage payment? Kingston Development Corp. purchased a piece of property for $2.79 million. The firm paid a down payment of 15 percent in cash and financed the balance. The loan terms require monthly payments for 15 years at an annual percentage rate of 7.75 percent, compounded monthly. What is the amount of each mortgage payment?

Explanation / Answer

ost = 2,790,000

P = 2,790,000 - 2,790,000(15%) = 2,371,500

A = P(A/P,i,N) = 2,371,500 (A/P,i=7.75%/12,N=15*12) = 2,371,500 (0.008547) = 20,269.21

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