What is the annual payment on a mortgage of $300,000 at 10% interest over a thirty-year term?

To determine the annual payment on a mortgage, we typically use the standard mortgage payment formula, which incorporates the loan amount, interest rate, and the number of periods (in this case, years). The mortgage payment can be calculated using the formula for an amortizing loan payment:

[ PMT = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1} ]

Where:

• ( PMT ) is the monthly payment,

• ( P ) is the principal amount of the loan (in this case, $300,000),

• ( r ) is the monthly interest rate (annual rate divided by 12),

• ( n ) is the total number of payments (number of years multiplied by 12).

For this scenario:

1. The annual interest rate is 10%, so the monthly interest rate ( r ) is ( \frac{10%}{12} = \frac{0.10}{12} \approx 0.0083333 ).

2. The total number of payments over 30 years (360 months) is ( 30 \times 12 = 360 ).

When you perform the calculation, the monthly payment works