To calculate the monthly mortgage payment, we can use the amortization formula:

$M = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1}$

Where:

• $M$ = monthly payment
• $P$ = loan amount (principal)
• $r$ = monthly interest rate (annual interest rate divided by 12)
• $n$ = total number of payments (loan term in years multiplied by 12 months)

Given Data:

• Purchase price of the house = $130,000
• Down payment = $40,000
• Loan amount $P = 130,000 - 40,000 = 90,000$
• Annual interest rate = 2.5% or 0.025
• Monthly interest rate $r = \frac{0.025}{12} = 0.0020833$
• Loan term = 30 years
• Total number of monthly payments $n = 30 \times 12 = 360$

Now, we can substitute these values into the formula:

$M = 90,000 \times \frac{0.0020833(1 + 0.0020833)^{360}}{(1 + 0.0020833)^{360} - 1}$

Let's calculate that.

Given values P = 90000 # loan amount annual_rate = 0.025 # annual interest rate r = annual_rate / 12 # monthly interest rate n = 30 * 12 # total number of payments (30 years)

Amortization formula to calculate the monthly payment

M = P * (r * (1 + r)**n) / ((1 + r)**n - 1) round(M, 2) # rounding to the nearest centThe monthly payment that the Turners will be required to make is $355.61.

Would you like further details or clarification on the calculation? Here are some related questions that might interest you:

1. How can the total interest paid over the life of the loan be calculated?
2. What happens to the balance of the loan after each payment?
3. How would the monthly payment change if the interest rate were higher or lower?
4. How does the amortization schedule affect the principal and interest portions of each payment?
5. What are the tax implications of mortgage interest payments?

Tip: It’s always useful to review an amortization schedule to understand how much of your payment goes toward interest versus principal. It will change significantly over time!