Answer-first summary for fast verification
Answer: $1,199.10
For a 30-year mortgage: - Principal \(PV = 200{,}000\) - Monthly interest rate \(i = 6\%/12 = 0.5\% = 0.005\) - Number of payments \(T = 30 \times 12 = 360\) Apply the formula: \[ PMT = 200{,}000 \cdot \frac{0.005(1.005)^{360}}{(1.005)^{360}-1} \] This equals approximately **$1,199.10**. So the correct answer is **C**.
Author: Manit Arora
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Q-48.2 Fabozzi gives the monthly payment of a fully-amortizing mortgage as: original balance * [i * (1 + i)^T] / [(1 + i)^T - 1] where (i) is the interest rate and (T) is the loan term. If the interest rate on a $200,000 fully amortizing mortgage loan is 6.0% on a 30-year fully-amortizing mortgage loan, what is the monthly payment?
A
$599.55
B
$1,099.55
C
$1,199.10
D
$1,99.55
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