suppose you purchase a home for 350,000. After making a 50,000 down payment, you borrow the balance through a mortgage loan at 4% for 15 years. WHat is the monthly pinciple and interest payment requied by the mortgage company

To calculate the monthly mortgage payment, we will use the following formula for fixed-rate mortgages:

\[
M = P \frac{r(1+r)^n}{(1+r)^n - 1}
\]

Where:
- $M$ is the monthly mortgage payment (principal + interest),
- $P$ is the loan amount (principal),
- $r$ is the monthly interest rate (annual interest rate divided by 12),
- $n$ is the total number of payments (loan term in years multiplied by 12).

### Step-by-Step Calculation:

1. **Loan Amount**:
   \[
   P = 350,000 - 50,000 = 300,000
   \]
   
2. **Monthly Interest Rate**:
   \[
   r = \frac{4\%}{12} = \frac{0.04}{12} = 0.00333
   \]

3. **Number of Payments**:
   \[
   n = 15 \times 12 = 180 \text{ months}
   \]

Now, substituting the values into the formula:

\[
M = 300,000 \times \frac{0.00333(1 + 0.00333)^{180}}{(1 + 0.00333)^{180} - 1}
\]

Let me calculate the result.The monthly mortgage payment, including both principal and interest, would be approximately **$2,219.06**.

Would you like more details on how the payment was calculated or have any further questions?

Here are 5 related questions to deepen your understanding:

1. How does the loan term (number of years) affect the monthly mortgage payment?
2. What happens to the monthly payment if the interest rate increases to 5%?
3. How does making a larger down payment affect the monthly mortgage payment?
4. Can you pay off a mortgage early, and how would that impact interest costs?
5. What is the breakdown of principal and interest in the first few payments?

**Tip**: Extra payments towards the principal early in the mortgage can significantly reduce the total interest paid over the life of the loan.

Suppose you purchase a home for 350,000. After making a 50,000 down payment, you borrow the balance through a mortgage loan at 4% for 15 years. What is the monthly principal and interest payment required by the mortgage company?

Find out how to calculate the monthly principal and interest payment for a mortgage loan on a $350,000 home with a $50,000 down payment. Learn the step-by-step solution using loan amortization formulas and explore how interest rates and loan terms affect payments.

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