Susan is paying $0.30 per $100 on her $483,000 home in homeowners insurance annually. If her annual homeowners insurance premium is divided into twelve equal monthly installments to be included on each of her monthly mortgage payments of $2128.00, what is her total monthly payment?

Question

a.
$2,248.75
b.
$2,409.75
c.
$3,381.00
d.
$3,577.00

Answer 1

To determine Susan's total monthly payment, we first need to calculate her annual homeowners insurance premium and then find out how much she will pay monthly.

1. Calculate the annual homeowners insurance premium:

The cost of homeowners insurance is $0.30 per $100 of the home's value.

\[ \text{Home Value} = $483,000 \] \[ \text{Insurance Cost per } $100 = $0.30 \] \[ \text{Number of } $100s \text{ in } $483,000 = \frac{483,000}{100} = 4830 \] \[ \text{Annual Premium} = 4830 \times 0.30 = $1,449.00 \]

2. Calculate the monthly insurance premium:

\[ \text{Monthly Insurance Premium} = \frac{1,449.00}{12} \approx $120.75 \]

3. Calculate the total monthly payment:

The total monthly payment includes the mortgage payment and the monthly insurance premium.

\[ \text{Monthly Mortgage Payment} = $2,128.00 \] \[ \text{Total Monthly Payment} = 2,128.00 + 120.75 \approx $2,248.75 \]

Thus, the total monthly payment is:

a. $2,248.75