Neeta takes out a 25-year mortgage of $40 000 to buy her house. Compound interest is charged on the loan at a rate of 8% per annum. She has to pay off the mortgage with 25 equal payments, the first of...

Neeta takes out a 25-year mortgage of $40 000 to buy her house. Compound interest is charged on the loan at a rate of 8% per annum. She has to pay off the mortgage with 25 equal payments, the first of which is to be one year after the loan is taken out. What is the annual payment?

Expert Answers info

Rylan Hills eNotes educator | Certified Educator

calendarEducator since 2010

write12,544 answers

starTop subjects are Math, Science, and Business

Neeta has taken a mortgage of $40000 to buy her house. The rate of interest applicable is 8% per annum. The mortgage is for 25 years and has to be repaid in 25 equal installments starting one year after it was taken.

Let the amount that has to be repaid be represented by P. To estimate the value of P, use the...

(The entire section contains 137 words.)

Unlock This Answer Now


check Approved by eNotes Editorial