Answer: monthly payment on the loan =$ 1,290.24

Working notes for the above answer is as under

A borrower makes a fully amortizing CPM mortgage loan.

Principal = $125,000

Interest = 11.00%

Term = 20 years

CPM Payment:

The monthly payment for a CPM is found using the following formula:

Monthly payment

= PMT (n,i,PV, FV)

Monthly payment

= PMT (20 yrs, 11%,$125,000 , $0)

Solving this equation we will get,

Payment = $1,290.24