Question

John's parents purchased their first home in the 1980s with a 30-year

Answer 1

Answer:

Option A,$ 1,832.91   is correct

Step-by-step explanation:

The monthly payment can be computed using the below pmt formula i excel shown below:

=pmt(rate,nper,-pv,fv)

rate is the monthly rate on the mortgage which is 17.5%/12=0.014583333

nper is the number of months of payment i.e 30*12=360

pv is the amount of the loan which is $125,000

fv is the total amount of repayment which is unknown

=pmt(0.014583333 ,360,-125000,0)=$ 1,832.91  

The correct option is A,$ 1,832.91  which is the amount of money they need to pay back on the mortgage for 360 months