Answer:
Melissa monthly mortgage payment is $679 which is close to option C ( $662.93)
Step-by-step explanation:
The cost of the house = $160,000
Melissa will make 20% down payment which is equivalent to 0.2 of $160,000
= $32,000
The balance to be paid would be $160,000 -$32,000 = $128,000
Using the periodic interest rate formula which is expressed by the formula:
P = a/[{(1+r)^n]-1}/{r(1+r)^n}]
here;
P = the monthly payments.
a = the amount of the loan = $128,000
r = the annual rate. = 4.9%/ 12 = 0.049/12 =0.004083
n = number of monthly payments. = 12 × 30 = 360
Thus;
P = 128,000/[{(1+0.004083)^360]-1}/{0.004083(1+0.004083)^360}]
P = 128,000 /[{(1.004083)^360]-1]/0.004083(1.004083)^360]]
P = 128,000 / [(4.336-1) / 0.004083( 4.336)]
P = 128,000 /[(3.336)/ 0.0177]
P = 128,000/188.47
P = $ 679
Melissa monthly mortgage payment is $679 which is close to option C ( $662.93)
