Question

If the purchase price for a house is $218,500, what is the monthly payment if you put 3.5% down for a 30 year loan with a fixed rate of 6.5%?
a.
$1,332.73
b.
$1,378.19
c.
$1,247.54
d.
$646.40

Answer 1

Loan = 218,500*(1 − 0.035) = 210,852.50.
Monthly rate r = 0.065/12 = 0.0054166667, N = 360.

Payment = P * r / (1 − (1+r)^−N)
= 210,852.50 * 0.0054166667 / (1 − (1.0054166667)^−360)
≈ $1,332.73

Answer: a. $1,332.73