Question

Megan and Steve have found a home they want to purchase. The selling price is $320,000. They will put 20% down and get a 30 year, 6% APR, monthly payment mortgage. Insurance is $1,800 per year and taxes are $3,000 per year. What is their monthly PITI?
a. $1,684.85
b. $1,784.85
c. $1,934.85
d. $1,534.85

Answer 1

Answer:

c. $1,934.85

Explanation:

given data

selling price is $320,000

down payment  = 20 %

APR  r = 6% =  0.005  monthly

Insurance amount i = $1,800 per year

taxes T = $3,000 per year

Total time period n = 30 year  = 360 months

solution

first we get here Principal Amount on the Loan that is

P = $320,000 - 20% down payment

P = $320,000 - $64,000 = $256,000

and now we get here Monthly PITI Payment  that is express as

C = $\frac{r\times P }{1-(1+r)^{-n}} + \frac{T}{12} + \frac{i}{12}$   ...............1

C = $\frac{0.005 \times 256000 }{1-(1+0.005)^{-360}} + \frac{3000}{12} + \frac{1800}{12}$    

so The Monthly Payment is $1934.85.

correct answer is  c. $1,934.85