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Houses are expensive. To help alleviate the financial stress of purchasing a house, banks and other lending institutions give mortgages. Some mortgage allows the homeowner to borrow some big sum of money using the home being collateral on the loan. The deposit will charge attention to the borrower depending on the borrower's credit rating. It is important the borrower calculates the monthly payments to determine if he may afford to shell out it. If he cannot afford the monthly payments, then the lending institution could foreclose on the house.

Instructions

1 Determine the volume regarding money you will borrow, the interest rate the lender will charge and the number regarding payments you will have to make. For example, any person considers outside any $15 web site, internet site website website mortgage at a 4 percent interest rate and need to make 36 internet site payments.

2 Divide the interest rate by 12 months to see the attention charged per month. In the example, 4 percent divided by 12 months equals website. website website3333333.

3 Add the interest charged per calendar month to just one. In the example, 1 plus internet site. website website3333333 equals 1. internet site website3333333. Raise the sum to the strength regarding the negative of the number of needed expenses. In the example, raise 1. web site website3333333 to the power regarding -36 website. This equals internet site.3 website1795865.

4 Multiply the attention rate each month by the cost of money you borrowed. In the example, internet site. website website3333333 times $15 internet site, web site website website equals $5 website website.

5 Divide the number computed within Step 4 from the quantity you computed from Stage 3. In the example, $5 website website divided via website.3 website1795865 equals monthly mortgage payments of $1,656.75.

References

Oak Road Programs: Loan or Investment Formulas Bankrate.com: Loan Calculator

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