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



Please select the best answer from the choices provided


A
B
C
D

Answer 1

A

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

So choice A.