From the given table, we can see that the monthly principal and interest payment per $1000 is given at various rates and a different number of years.
First, we need to get the monthly principal and interest payment per $1000 for a 20-year mortgage and an annual percentage rate (APR) of 5.5%.
• From the table, the price amounts to, $6.87887, (simply check 5.5% APR under 20years).
$1000 financed yields $6.87887. This can be expressed as;
• $1000 = $6.87887.................................... 1
Based on the given question, we need to get the monthly principal for the amount of $285,000. This can be expressed as:
• $285,000 = x .............................................. 2
Divide equations 1 and 2 to find the value of "x"
[tex]\frac{1000}{285000}=\frac{6.87887}{x}[/tex]Cross multiply:
[tex]\begin{gathered} 1000x=285,000\times6.87887 \\ x=\frac{285\cancel{000}\times6.87887}{1\cancel{000}} \\ x=285\times6.87887 \\ x=\$1,960.4779 \end{gathered}[/tex]Therefore the monthly principal and interest payment is approximately $1,960.4779
