Question

Lisa's new home had a purchase price of $185,500. She got a 15-year fixed mortgage for 75% of the purchase price. The interest rate on the loan was 2.990%. What was her monthly payment?
A)$1,377.21
B)$623.97
C)$4,159.83
D)$957.72
E)$2,990

Answer 1

Based on the purchase price of Lisa's home, the mortgage period, and the interest rate on the loan, Lisa's monthly payment is D)$957.72.

What is Lisa's monthly payment?

First find the loan amount:

= 75% x purchase price

= 0.75 x 185,500

= $139,125

Convert rate and period to monthly figures:

= 15 x 12                                                        = 2.990 / 12

= 180 months                                                = 0.24917%

Monthly rate is an annuity while the loan amount is the present value of an annuity:

Present value of annuity = Annuity x ( 1 - (1 + rate) ^ -number of periods) / rate

139,125 = A x  ( 1 - (1 + 0.24917%) ⁻¹⁸⁰) / 0.24917%

A = 139,125 ÷ ( ( 1 - (1 + 0.24917%) ⁻¹⁸⁰) / 0.24917%)

A= $957.72

Find out more on monthly mortgage payments at brainly.com/question/22846480.

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