Question

If the purchase price for a house is $309,900, what is the monthly payment if you put 20% down for a 30 year loan with a fixed rate of 6%?
a.
$729.98
b.
$912.48
c.
$1,486.41
d.
$1,858.01

Answer 1

Loan = 309,900*(1 - 0.20) = 247,920.
Monthly rate r = 0.06/12 = 0.005, n = 360.

Monthly payment = L * [r(1+r)^n]/[(1+r)^n - 1]
= 247,920 * [0.005(1.005)^360]/[(1.005)^360 - 1] ≈ $1,486.41

Answer: c.