Calculate Mortgage Payments: $250,000 Loan at 4.2% Interest

To calculate the monthly payment, we can use the formula for calculating the monthly payment on a fixed-rate mortgage:

M = P [i(1 + i)^n] / [(1 + i)^n - 1]

Where: M = monthly payment P = principal amount (loan amount) i = monthly interest rate (nominal rate divided by 12) n = total number of payments (number of years multiplied by 12)

Let's calculate:

P = $250,000 i = 4.2% / 100 / 12 = 0.0035 (monthly interest rate) n = 30 years * 12 = 360 (total number of payments)

M = $250,000 [0.0035(1 + 0.0035)^360] / [(1 + 0.0035)^360 - 1] M = $250,000 [0.0035(1.0035)^360] / [(1.0035)^360 - 1] M = $250,000 [0.0035(1.0035)^360] / [1.42502 - 1] M = $250,000 [0.0035(1.0035)^360] / 0.42502 M = $250,000 [0.0035(1.48169)] / 0.42502 M = $250,000 * 0.005179415 / 0.42502 M = $1,294.85375

Rounding to the nearest cent, Mr. Jones' monthly payment will be $1,294.85.

Therefore, the given answer of $1,222.54 is incorrect.