Question

If the purchase price for a house is $445,500, what is the monthly payment if you put 5% down for a 30 year loan with a fixed rate of 6.25%?
a.
$2,740.19
b.
$2,605.87
c.
$1,314.84
d.
$1,249.10


Please select the best answer from the choices provided

A
B
C
D

Answer 1

Loan = 445,500*(1 - 0.05) = $423,225
Monthly rate = 0.0625/12 = 0.0052083333, n = 30*12 = 360

Monthly payment M = P*r / (1 - (1+r)^-n)
= 423,225*(0.0052083333) / (1 - (1.0052083333)^-360)
≈ $2,605.87

Answer: B