Question

Randy and Rhoda just got married and found their dream home. They will need to take out a loan of $96,000 to pay for the home, as they have a $24,000 down payment. Randy and Rhoda qualify for their loan at 4% for 30 years. Randy and Rhoda have the opportunity to purchase 2 points to lower their interest rate to 2%.

What will their monthly payment be without points?

Answer 1

$458.32

Step-by-step explanation:

The best way to determine the monthly payment that Randy and Rhoda will have to pay with a 4% interest rate, we should use an excel spreadsheet and the payment function =PMT(r,Nper,PV)

• Nper = 30 x 12 = 360
• r = 4% yearly / 12 months = 0.33%
• PV = 96000

=PMT(0.33%,360,96000)

Monthly payment = $458.32