The 30 minuteyear mortgage on a 20000 house that carries a 3

The 30 minute-year mortgage on a $20,000 house that carries a 3% annual interest rate.

a. What is the equivalent monthly interest rate (show in percentages with two decimals)

b. What is the monthly payment on the mortgage?

Solution

a. Equivalent monthly interest rate=3/12%=0.25%

b. Monthly payment on mortgage=$20000x25/100x100=$50