Question

Jim takes out a mortgage for 30 years at an interest rate of 2.49% and his monthly repayments are $986.50. What is the principal loan amount? Round your answer to the nearest ten thousand dollars. Do NOT round until you have calculated the final answer.

Answer 1

The principal loan amount will be 250000. P is denoted by the principal loan amount

What is the amount?

The complete repayment of money at the end of the period for which it was borrowed is referred to as the amount.

The given data in the problem is;

P is the principal loan amount

r is the rate of interest = 2.49%

n is the time period= of 30 years

The formula for the principal loan amount  is found as;

$\rm P=M(1-(1+\frac{r}{12} )^{\frac{12}{n}$

$\rm P=986.50(1-(1+\frac{0.249}{12} )^{\frac{12}{30} }\\\\ P= 250000$

Hence the principal loan amount will be 250000.

To learn more about the amount, refer to the link;

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