Question

If 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

The Answer is B) 1937.12

Answer 2

Answer:

b. $1,937.12

Step-by-step explanation:

Given,

Purchasing price of house = $345,000,

Down payment = 10 % of the purchasing price

$=\frac{345000\times 10}{100}$

$=\frac{34500000}{100}$

$=\ 34500$

Thus, the principal value of the loan, P.V. = Purchasing price - Down payment

= $345,000 - $34500

= $ 310500

Also, the annual rate of percentage = 6.375% = 0.06375,

⇒ The rate per month, r= $\frac{0.06375}{12}$

Time, n = 30 years = 360 months

We know that,

The monthly payment of a loan is,

$P=\frac{r(P.V.)}{1-(1+r)^{-n}}$

$=\frac{\frac{0.06375}{12}(310500)}{1-(1+\frac{0.06375}{12})^{-360}}$

$=1937.11603586\approx \ 1937.12$

⇒ Option B is correct.