218,500 - (3.5% down payment) =
210,852.50
30 years = 360 months
rate 6.5%
Use the loan payment formula (REALLY complex - see attached).
rate = 6.5/1,200 =
<span>
<span>
<span>
0.005416667
</span>
</span>
</span>
monthly payment = (rate + [rate / (((1 + rate)^months) -1)] * principal
monthly payment = (<span>0.005416667 + [</span><span>0.005416667 / (((1</span><span>.005416667)^360)-1)] * principal
</span>monthly payment = (0.005416667 + [0.005416667 / (((1.005416667)^360)-1)] * principal
monthly payment = <span>0.005416667 + [</span><span>(0.005416667 / 6.9917988084 -1)] * </span>
<span>
<span>
<span>
210,852.50
</span>
</span>
</span>
monthly payment = 0.005416667 + [(0.005416667 / 5.9917988084)] *
<span>
<span>
210,852.50
</span>
</span>
monthly payment = 0.005416667 + [(0.005416667 / 5.9917988084)] *
<span>
210,852.50
</span>
<span>monthly payment = (0.005416667 + 0.0009040135) * </span><span>210,852.50
</span>monthly payment =
<span>
<span>
<span>
0.0063206805
</span>
</span>
</span>
* <span>210,852.50
</span>monthly payment =
<span>
<span>
<span>
1,332.73</span></span></span>
Answer is a.
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