In many cases, lenders allow homeowners to include their homeowners insurance premium with their monthly mortgage payment. Tim’s home is worth $279,500. If his homeowners insurance premium is $0.33 per $100, how much is added to his monthly mortgage payment for insurance?

Question

a.
$7.69
b.
$76.86
c.
$92.35
d.
$922.35

Answer 1

To calculate Tim's homeowners insurance premium to add to his monthly mortgage payment, follow these steps:

1. Determine how many hundreds are in the home's value: \[ \text{Hundreds in value} = \frac{\text{Home value}}{100} = \frac{279,500}{100} = 2,795 \]

2. Calculate the insurance premium: \[ \text{Insurance premium} = \text{Hundreds} \times \text{Rate} = 2,795 \times 0.33 = 922.35 \]

Thus, the amount added to Tim's monthly mortgage payment for insurance is $922.35.

The correct answer is d. $922.35.