need You are thinking of purchasing a house. The house costs $400,000. You have

Question

need You are thinking of purchasing a house. The house costs $400,000. You have $57,000 in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price. The bank is offering a 30-yoar mortgage that requires annual payments and has an intorest rate of 6% per yoar. What will be your annual payment if you sign this mortgage? The annual payment is (Rond to the nearest dollar.) $400,00 where Enter your answer in the answer box. Save for Later t of t 19 MacBook Air

Explanation / Answer

Cost of house = $400,000
Down payment = $57,000

Amount borrowed = Cost of house - Down payment
Amount borrowed = $400,000 - $57,000
Amount borrowed = $343,000

Annual Interest Rate = 6%
Period = 30 years

Annual Payment * PVIFA(6%, 30) = $343,000
Annual Payment * (1 - (1/1.06)^30) / 0.60 = $343,000
Annual Payment * 13.76483 = $343,000
Annual Payment = $24,918.58

The annual payment is $24,918.58

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