Monthly mortgage loan payments

Cynthia's parents receive a loan of 125,000 EUR in return for fixed monthly payments \(K\) over the next 20 years as visualized in the graph below.

Using the variables number_payments and monthly_interest defined in the previous exercise, which are preloaded for you, it's up to you to determine the value of \(K\) based on the principle of actuarial equivalence.

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Instrucciones del ejercicio

Define the discount factors corresponding to the first payment month up until the last payment month. Do this by raising 1 plus monthly_interest to the power minus a vector from 1 until number_payments.
Create the variable payments which reflects the payment pattern. This should be a vector of ones with length number_payments.
Finally, calculate the monthly payment \(K\) by dividing the mortgage amount 125,000 by the present value of the payment pattern.

Ejercicio interactivo práctico

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# Define the discount factors
discount_factors <- (___) ^ - (___)

# Define the payment pattern
payments <- rep(___, ___)

# Calculate the monthly loan payment K
K <- ___ / ___(___ * ___)
K

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