Respuesta :
Using the monthly payment formula, it is found that the amount he will have to pay each month is of $649.45.
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:
- P is the initial amount.
- r is the interest rate.
- n is the number of payments.
In this problem, considering that the down payment does not count for interest, the parameters are given as follows:
P = 130000, r = 0.0438, n = 30 x 12 = 360.
Then:
r/12 = 0.0438/12 = 0.00365 -> 1+r = 1.00365.
Then the monthly payment 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]
[tex]A = 130000\frac{0.00365(1.00365)^{365}}{(1.00365)^{365} - 1}[/tex]
A = 649.45.
More can be learned about the monthly payment formula at https://brainly.com/question/2151013
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