Concept explainers
To find: The amount to be borrowed.
Answer to Problem 20E
The amount borrowed is $80,783.21.
Explanation of Solution
Given:
Mortgage Payment = $650
Interest Rate = 9% per year (or 0.75% monthly)
Number of Payments = 30 years (or 360 months)
Formula:
Here,
AP = Present Value of Annuity
R = Periodic Payment
i = Interest Rate
n = Number of Years
Mortgage: A mortgage is considered as a guarantee or a security for a loan on property or real estate. The mortgagor enters into an agreement with a mortgagee to receive loan amount initially and repay the loan during a specified time period and interest rate.
Calculation:
The amount borrowed is calculated by adding 1 plus interest rate to the power minus number of years and subtracting the result by 1 and dividing the whole result by interest rate and multiplying the final result with periodic payments.
Therefore, the amount borrowed is $80,783.21.
Chapter 12 Solutions
Precalculus: Mathematics for Calculus - 6th Edition
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