Question

the purchase price for a house is $345,000, what is the monthly payment if you put 10% down for a 30 year loan with a fixed rate of 6.375%?
a.
$1,569.27
b.
$1,937.12
c.
$2,152.35
d.
$3,314.59

Answer 1

Loan = 345,000 × 0.90 = $310,500
Monthly rate r = 0.06375/12 = 0.0053125, n = 30×12 = 360

Monthly payment M = P r / (1 − (1 + r)^−n)
= 310,500 × 0.0053125 / (1 − (1.0053125)^−360) ≈ $1,937.12

Answer: b.