Question

Eric took out an 80/20 mortgage to buy a house costing $175,000. The first (80%) mortgage has an interest rate of 4.75%, and the second (20%) mortgage has an interest rate of 7.525%. Both are 30-year fixed-rate mortgages. What is total mortgage payment for this house?
A. $975.63

B. $805.87

C. $245.32

D. $730.31

Answer 1

Answer:

The total monthly mortgage payment for the house is $975.63

Step-by-step explanation:

The principle amount is $175000

80% of 175000 is = $0.8\times175000$ = $140000

20% of 175000 is = $0.2\times175000$ = $35000

Emi formula is :

$\frac{p\times r\times(1+r)^{n} }{(1+r)^{n}-1 }$

For 1st part:

p = 140000

r = 4.75/12/100=0.00395

n = $30*12=360$

Putting values in formula we get

$\frac{140000\times0.00395\times(1.00395)^{360} }{(1.00395)^{360}-1 }$

= $729.508

For 2nd part:

p = 35000

r = 7.525/12/100=0.00627

n = $30*12=360$

Putting values in formula we get

$\frac{35000\times0.00627\times(1.00627)^{360} }{(1.00627)^{360}-1 }$

= $245.301

Adding both the monthly payments:

$729.508+245.301=974.809$ dollars

This is closest to option A.

So, option A is the answer.

And for 30 years the mortgage payment will be =

$975.63\times12\times30=351226.80$ dollars