Name: Compare Mortgage Payments at Two Different Interest Rates (Formula)
Uploaded: 2020-03-16T03:21:36.000Z
Duration: 8 min 24 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

and take out a 30 year loan for the rest.

Part A, how much is the loan amount going to be?

the loan amount it going to be 90% of $222,000,

we convert the perfect to a decimal and multiply.

and therefore, the loan amount is $199,800.

If you were asked to find the down payment,

would be to take 222,000 and subtract 22,200.

And now for part B, what will you monthly payments be

Giving us 199,800 equals, on the right side,

PMT is the loan payment which we are solving for,

so we have PMT, then in the numerator we have

and in parenthesis, we have one plus r divided by n,

where r is the annual interest rate as a decimal

and n is the number of compounds per year.

So for part B, our 6%, which is a decimal, is 0.06.

because you're making monthly payments and there's 12.

All this has raised the power of negative n times t,

Close parenthesis, all this is divided by r divided by n,

negative 12 times 30 which is negative 360.

Right arrow to exit the exponent, close parenthesis

and then divide it by the parenthesis we have,

Which means on the right side of the equation,

we have PMT times approximately 166.7916144.

The equation is now 199,800 equals PMT times,

And that'll solve for PMT the loan payment,

we divide both sides of the equation by 166.7916144.

Notice on the right side, this quotient is equal to one,

giving us PMT times one, of course, which is just PMT.

So the monthly payment is going to be this quotient here,

we have 199,800 divided by 166.7916144, enter.

To the nearest cent, if the interest rate is 6%,

then the monthly payment will be $1,197.90.

we're asked to determine the monthly payments

if the interest rate is 7% instead of 6%.

and simply change 0.06, which is 6% as a decimal to 0.07,

So again, we will now change 0.06 here and here to 0.07.

it brings up the previous entry which we can then edit.

where now we can just change 0.06 to 0.07

and then change this 0.6 to 0.07 as well.

Then we press the right arrow until we're over the six

and change this to seven and then press enter.

And now this quotient is approximately 150.3075679

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Compare Mortgage Payments at Two Different Interest Rates (Formula)

expression

determine

negative

specifically