Using the monthly payment formula, we have that:
- The down payment is $35,000.
- The monthly payment is of $795.87.
What is the monthly payment formula?
It is given by:
[tex]A = P\frac{\frac{r}{12}\left(1 + \frac{r}{12}\right)^n}{\left(1 + \frac{r}{12}\right)^n - 1}[/tex]
In which:
- n is the number of payments.
The down payment is 20% of $175,000, hence:
D = 0.2 x 175,000 = $35,000.
Hence the parameters are:
P = 175,000 - 35,000 = 140,000, r/12 = 0.055/12 = 0.004583, n = 30 x 12 = 360.
Then the monthly payment is found as follows:
[tex]A = P\frac{\frac{r}{12}\left(1 + \frac{r}{12}\right)^n}{\left(1 + \frac{r}{12}\right)^n - 1}[/tex]
[tex]A = 140,000\frac{0.004583(1.004583)^{360}}{(1.004583)^{360} - 1}[/tex]
A = $795.87.
More can be learned about the monthly payment formula at https://brainly.com/question/26267630
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